Thursday, September 06, 2007
Price Cuts, iPhones, and Me
Marketwatch informs us that analysts are worried about the steep price cut for the iPhone.
Investors showed more concerns about Apple Inc. Thursday, as the consumer electronics maker appeared to be having trouble convincing the market that its steep price cut on the iPhone isn’t a sign that the ballyhooed mobile device is falling short of the market’s expectations.
By midday Thursday, Apple shares gave up nearly 2% to trade at $134.27 on heavier-than-normal volume.
The action came one day after the stock fell more than 5% following a company event in which Apple (AAPL:135.19, -1.57, -1.1%) Chief Executive Steve Jobs announced that the 8-gigabyte iPhone will now sell for $399 - which is $200 less than the price the device has carried since it came out on June 29.
Apple’s shares are still nearly 60% above their level at the beginning of the year, before the company unveiled the iPhone at a trade conference.
The stock surged nearly 15% in the days before Wednesday’s event on speculation of what new products the company would announce.
At the event in San Francisco, Jobs also said that Apple would phase out its 4GB iPhone due to what he said was overwhelming signs of demand for the the 8GB model. The 4GB version had cost $499.
The iPhone announcements partially overshadowed Apple’s largest revamp of its line of iPod music and video players in two years, and led some analysts and many investors to believe that Apple is experiencing weaker iPhone sales following initial weekend sales of 270,000 units.
Damn the analysts, here’s the real news: I was wondering whether a $600 iPhone really fit my “needs” (by which, of course, I mean, “technolust"); the $200 price cut almost ensures that I’ll have an iPhone in the near future. Keep in mind that the price drop for the 8 gig iPhone (now $399) drops its price below the original price of the 4 gig model ($499).
When the press conference was announced, I had already planned on budgeting to replace my trusty Nano with the new model that was sure to be announced. I wasn’t disappointed: the Fat Nano emerged as predicted with all sorts of new features. But then Steve had to go and break out the iPod Touch--essentially an iPhone without the phone bits and a few other features, but set up for WiFi--for just $299. Cool.
In fact, until I read about the price drop for the iPhone, I was ready to sign up for the Touch. But that voice is whispering in the back of my head: just a hundred bucks more buys you the full experience.
I’ve never been good at ignoring the little voice in my head, and now Apple has given that little voice a megaphone. Bastards.
I don’t know if demand was soft for the iPhone at the $499/$599 price point, but I can’t help but think that the big gift on lots of Christmas lists this year will be the $399 iPhone. Compared to the original price, it seems like a hell of a deal and it’s attached to one of the coolest gadgets to come along in years. The move might have been directly related to soft demand--in fact, if Apple could sell enough of the phones at the original price, they wouldn’t have dropped the two hundred bucks, would they--but that doesn’t make it a bad move. Addressing market concerns quickly and creating new buzz for the iPhone is hardly a bad thing, is it?
There’s still a chance that I’ll go the iPod Touch route instead and, honestly, it would make a heck of a replacement for my Nano. Still, I’m having a hard time getting that voice out of my head…
Comments & Trackbacks
I think I’ll wait for the gPhone (really), which is supposed to be released by early next year, at a lower price point, and without the onerous one-provider problem of the iPhone. (Yes, I know that’s fixable.)
Everything that I’ve seen about the gPhone makes it look like it would be a step back from my RAZR (which, when it comes to interface and functionality, I’m not entirely thrilled with anyway). I’m still not sure that I understand Google’s rumored push for the gPhone. That said, if the interface and functionality are better than what I’ve seen from rumor sites, I could be persuaded.
The provider problem isn’t a problem for me since I’m already an AT&T/Cingular/AT&T customer (anyone who has used AT&T wireless service in Colorado for long enough will probably know what I’m talking about).
Apple fanboys are almost as bad as Ron Paul supporters.
I bet you didn’t mean that in the nicest possible way, did you?
Of course. Every time Steve holds one of his press conferences you’re the first person I think of.
Steve and I are tight, man, tight. And if you aren’t careful, I’m totally calling the Apple Mafia on your ass. They’ll design you into submission; but at the end of the day you will look fabulous.
I don’t need the services of the Apple design mafia. I’m already as white as it’s possible to be.
Nice.
Steve Jobs is your daddy.
I’m locked in with my non-iPhone provider for a while, but I’m due for a phone upgrade. After this trip, though, I doubt if I can afford one, even if the iPod Touch looks like a marvelous upgrade to my 512k original Shuffle.
And, Doug? I yield to nobody in my whiteness ... I swear, sometimes I think I can get sunburned by Coppertone ads.
I’m wondering how well an iPod Touch plus an iPod microphone add-on plus Skype would work.
Here I am, commenting on a 3 day old post. Oh well, weekends will do that to me.
The problem for me with the iPhone is the AT&T service. Beyond the not-quite-3g setup that the iPhone runs on (that will supposedly soon be updated with a new release), AT&T Wireless sahuuuuucks. Their service here in the NY NJ metro area is abysmal, and beyond that fact, when I did use their mind-numbingly prone to dropped calls service, they f-ed me out of $300 back when I was a younger guy with a not so great salary and that was a LOT of money to me. On top of that, they signed me to a contract longer than the term indicated on my paperwork and would not put me back to the shorter term (how could I have fought that?) so I was stuck with them for an extra year. Their business practices, in my experience, are unconscionable. It’s all part of a long story, but I’ll never give AT&T another cent as long as I live, unless the days of the monopoly return ... and even then, I’d try my hardest to find a way around doing business with them. The iPhone is a really cool gadget, but for me they blew it when they signed exclusively with AT&T.