Apple CEO Steve Jobs has posted an open letter to all iPhone customers on Apple’s website. Here it is verbatim:
To all iPhone customers:
I have received hundreds of emails from iPhone customers who are upset about Apple dropping the price of iPhone by $200 two months after it went on sale. After reading every one of these emails, I have some observations and conclusions.
First, I am sure that we are making the correct decision to lower the price of the 8GB iPhone from $599 to $399, and that now is the right time to do it. iPhone is a breakthrough product, and we have the chance to ‘go for it’ this holiday season. iPhone is so far ahead of the competition, and now it will be affordable by even more customers. It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone ‘tent’. We strongly believe the $399 price will help us do just that this holiday season.
Second, being in technology for 30+ years I can attest to the fact that the technology road is bumpy. There is always change and improvement, and there is always someone who bought a product before a particular cutoff date and misses the new price or the new operating system or the new whatever. This is life in the technology lane. If you always wait for the next price cut or to buy the new improved model, you’ll never buy any technology product because there is always something better and less expensive on the horizon. The good news is that if you buy products from companies that support them well, like Apple tries to do, you will receive years of useful and satisfying service from them even as newer models are introduced.
Third, even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these.
Therefore, we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T, and who is not receiving a rebate or any other consideration, a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store. Details are still being worked out and will be posted on Apple’s website next week. Stay tuned.
We want to do the right thing for our valued iPhone customers. We apologize for disappointing some of you, and we are doing our best to live up to your high expectations of Apple.
Steve Jobs
Apple CEO
Source: http://www.apple.com/hotnews/openiphoneletter/
Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. – Steve Jobs, June 12, 2005
Above and beyond the call of duty? The squeaky wheel gets the grease? Insanely great or greatly insane? Too little, too late? The foundation of justice is good faith? I love it when a plan comes together? Do what you feel in your heart to be right, for you’ll be criticized anyway; you’ll be damned if you do and damned if you don’t? The customer is always right? It was preordained? Played like a fiddle? That you may retain your self-respect, it is better to displease the people by doing what you know is right, than to temporarily please them by doing what you know is wrong? Keep true, never be ashamed of doing right; decide on what you think is right and stick to it? The secret of life is honesty and fair dealing; if you can fake that, you’ve got it made? If life were fair, Elvis would be alive and all the impersonators would be dead?
Hey, we’ve got hundreds of ’em. What’s your take?
Can you read, you friggin’ moron?
Appple HAD to lower the price on account of the iPodTouch!!!
To quote my earlier explanation, for the hard of learning:
“Some people were interpreting this price decrease as a sign that the iPhone was not selling well. It was a “bad sign”, supposedly. Apple does not go into these things will nilly and talking out of their butt like so many people on the internet.
Fact is, they had to do something major to the iPod line, since it’s been a very long time since they have. And the last thing they’d want to happen is for MS to have learned from their initial Zune mistake and actually get some things right on their second try. I mean, as much as I hate MS, that is a possibility.
So you have the iPod Touch. But it could siphon off too many iPhone sales if you’re not careful, so the price *had* to come down to where it is if they want to own these markets. And clearly, the really want to own these markets.
A thief stole my iphone on Monday and I was pissed I lost $599.00 How with iphones at $399.00 and a $100 credit due me, I only filled half as bad.
Do they sell condoms at the Apple Store?
It just so happens that I need exactly $100 worth.
“Can you read, you friggin’ moron?
Appple HAD to lower the price on account of the iPodTouch!!!”
Apparently I’m a moron because I don’t understand that the Touch was in the pipeline, and it’s pricing set well before the initial iPhone launch.
That leaves you with 2 unpalatable choices, Either Steve consciously set out to milk the early adopters, with a preconceived plan to drop the iPhone price $200, and already had a secret strategy to offer a $100 rebate a day later (Your take on events),
Or that Apple messed up in thinking that the iPhone was good for a $200-$300 premium over the iPod Touch, then when that turned out not to be so, thought that fanboys would shut up and take the price drop without whining and quickly found out with massive fanboy complaints how wrong that was, and again corrected (My take).
“You mean, as in outselling every other smartphone?”
Yes, for a month, then sales slowed dramatically. Look up “pent up demand”
And “Steve has to pay the piper”?
Yes, there are such high expectations for the iPhone that they must hit the forecast numbers, or take a hit to the stock price.
No rationally conceived marketing strategy would have arrived at the idea for such a drop so quickly. There you have two choices Steve is stupid (Your take) or Steve messed up then corrected as events unfolded (My take).
Given that Steve is not stupid, the fact is that Steve did what he needed to do, re-set the price point on the phone to head off slumping sales, then dealt with the fallout.
“No, actually, Apple is just trying to keep the momentum going”
In your own retarded way I think you hit the point right there. Momentum had slowed. If there was still robust sales at $600, there would be no need for a price drop.
“Do they sell condoms at the Apple Store?
It just so happens that I need exactly $100 worth.”
An Apple representitive will be over shortly to insert $100 of condoms into your ass one by one, using his huge tallywacker.
You will be expected to smile throughout the process and keep buying Apple products.
Hang on, that already happened to you all on Wednesday…
Apple spankeded you, and you all likeded that shit.
NBC News (via MSNBC’s “Countdown” reported tonight that those who bought iPhone’s within 14 days of the announced price reduction would get a refund of the $200 price difference. If that’s true, that’s sweet…I was planning to take my $100 store credit and get myself a pair of the Shure earbuds for the iPhone, but with that $200 I just might get the 160GB iPod classic so I don’t have to flip a coin as to what to leave behind when I’m traveling…
@Jay — If you bought it at an Apple Store, they might be able to look up your receipt by serial number of the system, or they may be working out some deal with AT&T;to verify when the phone was activated (assuming it was activated by the purchaser and within a certain amount of time of purchase). That’s probably what’s delaying the system.
I deleted the receipt that was emailed to me when my iPhone worked perfectly, and I just bought mine last week (and it’s already saved my rear a couple of times); hope they’ll be able to track me down…
“Apple spankeded you, and you all likeded that shit.”
That’s right, we may all complain a bit, but in reality we know that Steve’s so smart that we really don’t mind giving him that extra money for 70 days use. Come to think of it, if the iPhone were a turd in a box with an Apple logo on it, we’d buy it for $600.
You have to understand that our job as fanboys is to put up with shit like this then come up with ridiculous explanations that only other fanboys will believe as to why it was always planned to be that way, and what a masterful strategy it was.
We then need to post those explanations on the Internet.
There are two issues here: the first Is that all technology comes down in price eventually, sometimes sooner rather than later. It’s all part of costing and trying to remain competitive. Apple, perhaps having accounted for falling component costs, its revenue stream from subscriptions, and predicted future sales in Europe and Asia, may have determined that they were ready to reduce the price of the iPhone (perhaps well ahead of schedule, perhaps not). Apple might also have known they were going to bring out a new iPod based on their multi-touch display and could not afford, from a market share perspective, to continue to price the iPhone as high as at launch. Remember, they purposely delayed Leopard so they could bring the iPhone out in June.
So, in your opinion, when should technology come down in price? After three months? After six months? After a year? Are you so certain? Again, unless you know what Apple intended or did not intend, you’re just talking out of your ass.
Which brings me to the second point: so let us imagine for a moment that Apple did make a mistake and overestimated the demand of the iPhone (and I do say, imagine, because you can’t offer any proof, just speculation). So what does Apple do? They quickly intervene in the market and reduce the price substantially to now compete with almost every other smartphone on features alone. That was going to happen anyways sooner or later (as it did with the iPod). That Apple acted quickly here (even in their response to the early adopters) shows why this company is so successful.
But you’d like to just focus on the idea that Apple made a mistake and then make facile statements like “Steve has to pay the piper” blah blah blah.
“That leaves you with 2 unpalatable choices, Either Steve consciously set out to milk the early adopters, with a preconceived plan to drop the iPhone price $200, and already had a secret strategy to offer a $100 rebate a day later (Your take on events), Or that Apple messed up in thinking that the iPhone was good for a $200-$300 premium over the iPod Touch, then when that turned out not to be so, thought that fanboys would shut up and take the price drop without whining and quickly found out with massive fanboy complaints how wrong that was, and again corrected (My take).”
I think I’ve shown why your first “choice” is absurd (except to conspiracy theorists) and your second “choice” is also. How could Apple mess up the price difference between the iPhone and the iPod Touch when they weren’t even released at the same time?
“No rationally conceived marketing strategy would have arrived at the idea for such a drop so quickly. There you have two choices Steve is stupid (Your take) or Steve messed up then corrected as events unfolded (My take).”
Again, in the world of technology in a highly competitive market, your oh-so-certain view of what is “rational” here is tenuous at best, if not quaint. And if, as I mentioned above, Apple did make a mistake, what is more important? That they “messed up” as you put it? Or that they “corrected as events unfolded”? Your entire argument hangs on flogging the former, like someone always looking for the spot on the tie but oblivious to all reality. This, coupled with your glib use of the word “fanboy” leaves me with two unpalatable choices: either you’re a troll or a jackass.
Do I have to choose?
I,m pissed, my son spent six months saving for that phone.he was going to buy a apple lap top, but i,m going to make him wait now.
What can you do? thats technology for you. I’m just happy about the $100, probably buy a new keyboard for my iMac.
“So, in your opinion, when should technology come down in price? After three months? After six months? “
Not after 70 days and not by that much. That points to a miscalculation. All your stupid arguments are just trying to prop up your view of an Infallible Apple. Slurp Slup, this Koolaid tastes good!
” do say, imagine, because you can’t offer any proof, just speculation”
The only proof are the channel checks which say demand has dropped off radically.
“I think I’ve shown why your first “choice” is absurd (except to conspiracy theorists) and your second “choice” is also.”
Clearly not. You seem to be arguing for the first choice.
“But you’d like to just focus on the idea that Apple made a mistake and then make facile statements like “Steve has to pay the piper” blah blah blah.”
Because Steve did make a mistake and did have to make a correction or face a worse fate (or colloquially, pay the piper now or later). Sorry if that’s tough for you to get your pea sized brain around.
“-so-certain view of what is “rational” here is tenuous at best,”
Right. If you say so. Nobody who puts together marketing plans for a living would agree with you. Clearly tens of thousands of unhappy customers don’t agree with you and don’t think a drop that fast was rational. And that’s ultimately the best test of whether the strategy was good or bad.
“Apple did make a mistake, what is more important? That they “messed up” as you put it? Or that they “corrected as events unfolded”?”
Neither, what is probably more important (for you not me, as I don’t really care how deluded you choose to remain) is fanboys coming to the realization that this Debacle is not part of some Master Plan by Apple, but a series of mistakes reacted to on the fly.
Is it good that they’re reacting an making touch choices Sure. Is it good that they screwed up so badly making the initial choices? No.
And verily it came to pass that the Jobs looked upon the Chosen People and said, I have made for you a wondrous device and it shall be called the iPhone. And thou all shalt buy one, and it shall cost you thirty score dollars, and to buy one shall mark to the world your faith unto me.
And the People looked upon the iPhone and saw that it was Good. And they went forth and brought their iPhones in great multitudes.
And proudly did they showith their iPhones to the Unbelievers, as a sign of their Faith. But Haugthy and Arrogant they did become.
And the Jobs looked upon his followers and thought that it was Bad. So he called them together and said unto them. For you I have prepared a mighty chastisement. Thou iPhone shall now be worth only forty score dollars and it shall be brought in great quantities by the members of the tribe of No-kee-a and Mo-to-rolla And thou shalt be special in people’s eyes no more.
Thou iPhone will serve as a mark of your sinful pride, and people shall laugh muchly at you.
And so it was done.
And there was much wailing, and sniveling and crying among the Chosen People. And the People spake unto the Jobs, Why Jobs have you now forsaken us? For verily as we may be great tossers, surely we do not deserve such a price cut? We shall seek out a new God.
And the Jobs listened, and heard their cries, and considered the loss of future worship. And so the Jobs said unto the People, Go unto the Temple of Apple, and thou shalt receive Goods to the value of five score dollars.
And the people then rejoiced, and sad until themselves, surely this was the plan of the Jobs all along. Praise be to the Jobs. The Jobs is all merciful and compassionate.
And the People went forth and worshiped the Jobs for all the days of their lives.
I do not see any discussion about the 4g IPhone now being obsolete. In addition to the $100 rebate, SJ should allow 4g owners to upgrade to the 8g iPhone at no cost. My fear is that Apple knows something that the rest of us do not. Will 4g be enough to service new software, etc. over like of our contracts? Will 8g be the new standard? Heck, I would be happy to forego the $100 instore credit for a free upgrade to an 8g iPhone.
“My fear is that Apple knows something that the rest of us do not.”
Apple now knows something they didn’t at launch time, that nobody wants a high end music/video phone with only 4GB of memory.
iTunes glitch reveals rental movies coming soon!
http://www.appleinsider.com/articles/07/09/08/apple_itunes_glitch_reveals_movie_rental_preparations.html
I feel the same as a lot of readers– although the rebate was appreciated, people value the quality of the products that Apple puts out to justify the cost. This, coming from someone who bought a 2G 20GB iPod for $899 Canadian! At the time, I thought it was expensive, but reasonable for a revolutionary product.
Didn’t MS drop the price of their Zune the same day? Where are the stories that MS has problems? Where is the outrage? Has MS offered a rebate to their loyal first adopters? Redmond we are waiting for a Press Release!
I really have nothing interesting to say. I just want to be one of the last people to blog this topic.
Last?
Yep, I think that you are the last blogger for this thread.
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I agree too. You’re the last. Kudos.
damnit.
No worries, M@c!