Fresh from the highs of introducing a new generation of iPod devices, Apple chief executive Steve Jobs has had to apologise to early buyers of the company’s iPhone product and offered US$100 store credit after a decision to slash the price of the iPhone from US$600 to US$400 provoked anger.
On Wednesday Apple said that it was discontinuing a 4GB model and was cutting the price of its 8GB iPhone by one-third.
The move was an unusual one for the company because normally Apple commands a premium price for its products.
Also earlier in the week research analyst iSuppli reported that Apple captured 1.8pc of all phone sales in the US and sales of the iPhone surpassed sales of the popular BlackBerry smart phone device.
In an open letter on the Apple website, Jobs said he was inundated with emails from hundreds of iPhone customers upset at the decision to drop the price within 10 weeks of the product appearing.
“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 cut-off 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,” Jobs said.
Jobs wrote that a third reason was to go after new customers with a lower price.
But he was mindful of the high emotions caused by the price cut and was offering a US$100 store credit.
“Our earlier customers trusted us and we must live up to that trust with our actions in moments like this,” he said.
By John Kennedy
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