“Apple Inc., offering $100 in credit to early iPhone buyers after cutting the price, excluded one of its most-popular items from the rebate: iTunes music,” Connie Guglielmo reports for Bloomberg.
“Customers can buy ‘just about anything sold by Apple’ if they submit a rebate claim by Nov. 30, Cupertino, California- based Apple said today on its Web site. The company didn’t give a reason for leaving out iTunes,” Guglielmo reports.
[UPDATE: 11:59pm EDT: Apple: $100 iPhone credit can be used for iTunes gift cards]
Full article here.
Apple Store (retail and online) and Apple’s iTunes Store are two completely different entities, however the Apple Stores do sell iTunes Gift Cards, which Apple has specifically excluded from the $100 credit.
In their “Terms and Conditions for the $100 store credit for Early iPhone owners program,” Apple states, “Customers may not redeem their store credits at any iTunes Store in the United States or elsewhere [or] to purchase Apple Gift Cards or iTunes Store Gift Certificates [or] to give iTunes Store content as gifts or to create iTunes Store allowances.”
Apple probably excluded iTunes Store purchases due to the scant profits the store reportedly generates for Apple, which doesn’t necessarily make it right.
[UPDATE: 11:59pm EDT: Apple: $100 iPhone credit can be used for iTunes gift cards]
[2:35pm EDT: Revised headline and our Take to reflect that Guglielmo got it right and we initially got it wrong: Apple has excluded iTunes Store from the $100 iPhone credit. Sorry, Connie! Also removed feedback that would be confusing due to our error.]
The Apple Store and iTunes Store are two different operations, not the same thing.
Am I the only one here who thinks it was pretty obvious that iTunes Store would be excluded?
Let’s think for a moment; a $100 store credit, if used in an Apple store, will generate sales of Apple hardware, Apple software or (less ideally) some other vendor’s product. On every such sale, Apple actually keeps certain percentage; if a third party product, then just a sales margin; if Apple product, then a lot more.
Now, if this $100 were to be spent on items in the iTunes Store, Apple’s chare of those revenues is barely break-even.
In other words, when they give store credit in their physical stores, it returns up to 50 cents on every dollar of that store credit. When they do the same in the iTunes Store, it barely returns a few cents.
Whas this confusing?
What’s hilarious is that it is completely acceptable for you to walk into an Apple Store and purchase a 100 dollar iTunes gift card with a 100 dollar Apple Store gift card.
This is allowed, we used this information to sell people gift cards at our store when the mom didn’t know what the kid wanted to get.
If I bought a iPhone and got a unexpected rebate, I certainly would spend it at iTMS.
In this case it would mean 100 songs or 50 TV shows.
The math is easy.
However because it’s a Apple Store only rebate, one has to “look around” to maximize their rebate. Most often “going over” what they originally expected to pay. Of course there will be some that will stay under, but then they will take a small loss.
Either case Apple wins and they have been quite willing to give 10%, 20% or even volume discounts without batting a eye.
For instance when Lepoard is released, expect a physical Apple Store 10% across the store discount for that night only.
This could add up to several hundred dollars worth of savings for you.
there is a very good reason for this…
the iTunes store and the Apple Store have two completely different systems of accounting. The problems would be serious.
Look at it this way, they didn’t have to give anything.
@MDN update.
Very big of you. I’m sure Connie feels better now. Maybe you and Connie can get a drink together and laugh about how you made a personal attack on her in a public forum before you realized that you were the morons.
SensorShipShape, If the math is so easy then why did you get it wrong? You would actually get 101 songs for $100.
$100 ÷ $0.99 = 101.01
Uh, profit margins have just a little to do with this too.
Why would they, or why should they, give $95 per iPhone user to GREEDY music distributors???
Well done Apple I say.
JRA got it right. It’s all about profit margins and the iTunes store doesn’t contain any for Apple. The $100 store credit is not worth $100 to Apple as their wholesale costs are much less.
OMG!! MDN APOLOGIZED?!?! I think I’m gonna fain…….
Bah! Humbug!!!
Am I being sensored? Lets try again…….
Bah! Humbug!!! Pingggg!!!! Camel Milk Flavoured Humbugs!!! Humbugers? No! Frankfurter’s!!!!
I am off to start manufacturing!!!!
It doesn’t matter that the Apple Stores and the iTunes stores are separate entities. Both are parts of Apple, Inc.
From Jobs letter of online apology regarding the iPhone price drop: “…a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store.”
“Any product” means just that…ANY product. I would take that to include iTunes gift cards, which are sold in Apple stores and online.
IMHO, Apple didn’t owe early adopters anything (as that’s just the way the tech cookie crumbles, AFAIC), however, the goodwill of that act of generosity has been seriously undercut by a restriction that just reeks of corporate cheapness.
It seems Apple can’t make (an apparent) gaffe with making another (real one) trying to clean it up. Not that I blame Apple for trying, but it really appears they don’t have anyone onboard with remotest sense of foresight in public relations.
I’ll lay odds that a significant number of people are very uphappy about this restriction. Not me, however. I’m just commenting the PR aspects from a PR perspective.
Besides, I didn’t buy an iPhone.
It’s because Apple makes almost nothing on the iTunes sales and makes 40 to 50% on everything else.
“It’s because Apple makes almost nothing on the iTunes sales and makes 40 to 50% on everything else.”
It’s because they want to fleece you out of $200, and give you back “$100” which only costs them $50. Also they want you to buy something more than $100, and throw in some extra cash. Letting you buy exactly $100 of iTMS songs is not what they had in mind.
I just got back from the apple store to redeem my $100 credit and only bought non-Apple products to ensure the least profit for Apple. I ended up spending 25 cents and came home with an iPod case, earphones and some blank DVDs.
Make the most of your rebates folks and make sure Apple feels the pain.
“I just got back from the apple store”
So you really hurt Apple by going into their store and using your credit to buy some stuff for way more then CompUSA would charge for the same thing, you frigtard.
@Mike,
Apple profits as much as 50% on third-party products, especially accessories.
Just so you guys know…there doesn’t seem to be any technical reason that you can’t buy iTunes gift cards from the brick and mortar stores. Apparently the only thing keeping you from doing it is the employees themselves. I used my iPhone credit to buy a fifty dollars gift card *tonight* in North Carolina.
Oooh… MDN doing a Ryan Block?
C’mon, MDN, You’re better than that.
@PreDrag
My, my, my. It was so obvious wasn’t it?
MDN Take: Also removed feedback that would be confusing due to our error.
WOW! This is some creative editing! Why not delete the whole thread of this embarrassing “reporting”, or change the contents so that MDN and the commenters were right all the way?
You know, 1984-style (the book, not the ad).
And while you are at it, I guess there must be some “confusing” wild projections of Apple TV success from after launch. Embarrassing. Delete or rewrite history.