iPhone Not Quite as Cool Today
What were the people at Apple thinking, especially Steve Jobs and the Marketing gurus there, when they dropped the price of the iPhone by $200 after only a few months on the market?
Just this summer, the popular phone sold for $599. Today, it sells for $399. If you paid the higher price this summer, would you still be a happy customer? I wouldn't.
Setting the right price point is among the most difficult but most important functions a business has when launching a new product. And even if the price was set incorrectly, it is silly and unprofessional to drop the price by 40 percent just months after the launch. By doing so you tell your customers the following:
- The product was never worth the higher price.
- Apple screwed up.
- But maybe no one will notice if they stick the correct price tag on their product.
Wrong! Your customers notice. Apple received hundreds of phone calls and e-mails from angry customers who purchased at the higher price. Backed into a corner and left with nowhere to go, "Apple CEO Steve Jobs apologized and offered $100 credits Thursday to people who shelled out up to $599 for an iPhone this summer and were burned when the company chopped $200 from the expensive model's price," according to an article posted on CNN.com.
But then Jobs muddied the water when he wrote in a letter on the company's Web site that "the technology road is bumpy," and then he wrote, according to the article, "there will always be people who pay top dollar for the latest electronics but get angry later when the price drops."
You think? Look, Apple got the price wrong. How is charging $200 more a few months ago any different from price gouging? This is not the way a business should choose its price points. The Apple seems to me to be a bit rotten. When a product is launched, the price should be set. Will the price change overtime? Sure. But not just a few months after its launch. Are you with me or against me on my take?
P.S. Seth offers links on the subject. David Reich also does a nice job of reporting on Apple's iPhone pricing.
