Sunday, September 09, 2007

Apple's iPhone Surprise

From $599 to $399, it was a price cut nobody expected so soon. I somehow guessed that the next version was going to be cheaper because that's typically the way Apple does things with the very first iPod costing $400 back in 2001 and the following year they had a $300 model. In 2004 they released a $250 model and by 2005 they had a $150 model.

But my best guess was a price cut in 6 months, maybe even a year, but the announcement last week was only after about 2 months of being in the market. My first thought turned to some of my clients who had already bought the iPhone and what they might be thinking. Fortunately enough irate customers complained and Apple is giving a $100 refund to the first time-buyers. I guess that's not too bad then ... $100 for being among the pioneers. But will these pioneers ever buy a first generation product from Apple again? or will they play the waiting game next time?

There is no other industry like the electronics and computer industry when it comes to price cuts. From flat-screen TVs to digital cameras, waiting a little bit typically means paying much much less than the early adaptors. And now the industry is learning that these early adaptors have become more price sensitive.

Electronics buyers have price limits

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