iPhone Price Cut Means Nothing - Deal with It

A lot of press was generated by the Apple’s move to drop the iPhone’s price by $200.00 bucks a mere 2 months after its introduction. John Gruber nails it in his mini-review of the NYT Bits blog post made by Saul Hansell.

Gruber points out that

I think Jobs speaks the plain truth far more often than many think. Or at least he says what he believes is the truth.

I would only qualify this further by saying that, when making his intentions clear and explaining himself, Jobs is very honest. Whether those intentions are good, bad or whatever is irrelevant to the point: he is honest.

I have used Macs since 1983. I am also a fine art photographer who has more than $35,000 in photographic equipment. All my life I have bought items whose appeal rests in their latest-and-better technology. All my life I have seen the prices for the items I have bought drop dramatically 4-6 months after I purchased them. In many instances I have seen the price drop a few weeks after my initial purchase.

The real questions here, for me, are the following:

Is the item worth any less to me because it now sells for less?

No.

Would I still buy the item if the price had gone up to where it was, from what it was marked down to?

The answer for me is really easy. YES.

The reason is that, like many people, I obsess over these type of purchases. I research, learn technology, read reviews, assess my needs critically and finally make a solid case to myself that the item is worth it. None of these items have to do with price. Price is determined by whats available to me in my cash flow.

I use a tiny Nokia 6126 which was free with my $49.00 dollar a month ATT calling plan. I only use my phone to make/receive phone calls and check/receive voice mail. That level of functionality is all that I require at the moment.

I have used a borrowed iPhone for more than 3 weeks, and I think its awesome product. The reality is that I simply don’t need it at the moment. My 30Gig video iPod holds my music just fine.

When I first saw the iPhone I knew I would own one someday. I also knew, that I would not own one until the SDK was official. When that happens the market will explode, I can’t wait. At that point is when the iPhone will really fit my needs. A Mac running OS X in my pocket… YES PLEASE!

From the NYT Bits blog Hansell points out that

The more iPhones sold, the bigger the ecosystem around it, and the more that is developed that attracts and retains customers.

I would only add to this that the mac development community is a force to be reckoned with (you ain’t seen nothing yet).

Now to the point of this entry:

Apple users expect a lot from Apple, I think Apple was expecting a little more support from us this time around. That sounds a bit off but I need to setup the point. What I mean is that Apple has always done things in a seemingly harsh matter-of-fact way, and then they give you the real reasons. Think of the day the clones died, WebObjects price drops; those were harsh but we understood what their position was because they made it clear.

So what changed with the iPhone? The explanation that Christmas is coming and they wanna go for the goal seemed reasonable to me. If the only difference between people’s indignation and pride of purchase is the time it took Apple to lower prices, then its bullshit. Nothing changed in the value of what you hold in your hand.

So why such a widespread negative reaction. There is another side to this, and possibly something that will test Apple a bit. The points of tension are adding up: no cut/paste, no SDK, the software’s assumption that only iTunes ringtones are valid, the virtual keyboard, etc. In simple math terms I think that this product had a certain amount of things that people wished were different, yet willing to overlook with some degree of resignation. The news of the price drop could have made people feel like, once they took the things they were putting up with into account, the iPhone was in fact finally priced appropriately. In a way this is a good wake up call for Apple: it makes them look for these tension points and work to resolve them.

In conclusion, I feel that if you were sure you wanted to buy it, and you liked it enough not to return it, and you use it daily, you have nothing to complain about, you got a kick ass product and your money’s worth.

Deal with it.