Apple's CEO Steve Jobs posted a letter on the company website yesterday to current iPhone users who bristled at Apple's decision to reduce the cost of the 8GB iPhone by $200, a mere two months after its launch. Jobs apologized to these early adopters and offered a $100 credit at Apple stores.
"iPhone is so far ahead of the competition, and now it will be affordable by even more customers," Jobs wrote in the letter.Ãƒâ€šÃ‚Â "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."
Current Analysis analyst Avi Greengart said the price reduction made sense because a $599 8GB iPhone looks much more expensive when compared to an $299 8GB iPod Touch. "This $200 price drop will keep the iPhone looking attractive despite the new iPod Touch, and I think the drop in price will make AT&T happy, too," Greengart said. "A $399 iPhone is still not a mainstream price point though."
"The iPod Touch was really the big story of the week from Apple's perspective,"Ãƒâ€šÃ‚Â Greengart continued,Ãƒâ€šÃ‚Â "and I think they got distracted by the ire of early iPhone adopters. In some ways, Apple just can't win. This rebate or gift certificate is really just going to make the seriously angry users even angrier because its an incentive to spend more [on Apple products]."
Interestingly, Nokia looked to capitalize on the iPhone price reduction with an advertisement on Google:
For more on the rebate:
- read Jobs' entire letter here
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