Steve Jobs Is Either A Dunderhead Or A Genius

Was the decision to slash $200 off the iPhone the right one?

Let me begin by saying I am an absolute Apple Macintosh nut! I always have been since I was first introduced to them in my freshman year of college at the University of Tennessee back in 1989. My English class that year was at a desk with a Mac and it blew me away how a computer like that could do so much.

The more things change, the more they stay the same.

It's nearly two decades later now and Macs are still cool to me. In fact, I just got the new iMac and the much-heralded iPhone about six weeks ago and LOVE 'em better than I ever expected. Both have been business expenses well worth the price paid to stay in touch and get the job done well.

With that said, I have to express my slight dissatisfaction and disappointment with Apple CEO Steve Jobs right now. His quick-handed decision to slash the price of the 8GB iPhone by $200 to $399 seemed a bit desperate to me. After just a little more than two months on the market, you feel the need to drop the price?

I suppose the new iPod touch product had something to do with this decision. It's an 8GB iPhone without the phone and allows users to use it as an iPod, surf the Internet, watch YouTube, download from iTunes, and more. The cost? $299!

This would have cannibalized iPhone sales which Jobs could not allow to happen. It made good business sense dropping the price, but most people expected it to happen around late November when Christmas shopping season hit. Looks like Apple is wanting to kickstart that trend three months early.

That's all well and good, but what about those poor people who bought the 4GB iPhone at $499? Now they have something that's half as good and cost them $100 MORE than what the 8GB iPhone costs now. Will they be allowed to switch to an 8GB at no charge as a goodwill gesture, Mr. Jobs? Not as it currently stands.

And those poor AT&T store workers! They found out about the price cut in a text message and e-mail just minutes before the announcement. How tasteless is that? Apple should have given at least a week's notice to AT&T to prepare their frontline workers for the onslaught of both angry old and anxious new customers. Bad business, Mr. Jobs!

Although I wasn't one of the people who purchased the iPhone when it immediately came out (waiting in line for days for a phone just ain't normal), I did get mine in late July for a trip to Indiana when I wouldn't have Internet access. It was awesome being able to keep up with my e-mails, check my blog and forum, and keep in touch with the world while away. Overall, it's been well worth the cost I paid several times over and it has continued to be a business lifesaver for me.

Nevertheless, it still stinks that the price dropped so much, so fast--a $3 a day depreciation that doesn't make for good business if you ask me. Even after Jobs wrote this apology letter promising a $100 Apple store credit to iPhone customers who paid $599 for the phone, it merely left this Apple fan a bit disgusted about it.

Is that the best you can do, Mr. Jobs? Sure, $100 credit is better than zippo, but how about a $200 Apple credit, hmmm? At least there would be the perception that you seriously wanted to make amends to your loyal base of customers who love your company (and I'm one of them!). Plus, you should have announced this BEFORE the price cut rather than as a knee-jerk reaction based on the e-mails you received. You had every intention of sticking it to your best customers now, didn't you?

In actuality, this $100 Apple credit Jobs announced will cost the company about half that much money, so it's not really that great a deal after all IMHO. I'll probably buy a car charger for the iPhone and any other accessories adding up to $100, but I will need to order them online since I don't have an Apple store near me.

Why not give the credit in the iTunes store, Mr. Jobs? We have this cool phone that plays music and videos, so wouldn't it make sense to extend that $100 to iTunes since you own it, too? Can you do that? Please consider this as an option with the credit offer details you are going to announce next week.

Incidentally, if you purchased your iPhone within the past 14 days, then you are entitled to a FULL REFUND as per the Apple Sales and Refund Policy. If you paid $599 for your iPhone, then this may be a great way to get your $200 back in cash when you purchase your new iPhone at $399. It's too late for me, but maybe not for many of YOU. GOOD LUCK!

Am I mad about this? Just a little. But I will admit that owning an iPhone has been the best business expense I've ever made. Now there will be plenty of others who will get to enjoy it just as much as I have. It really is the most amazing technological advancement I have seen in my lifetime and I HIGHLY recommend it.

Is Steve Jobs a dunderhead or a genius? Time will tell. What do YOU think?

9-9-07 UPDATE: Here was an excellent comment from one reader that mirrors much of my own feelings about the iPhone price cut:

I have to say I'm not that terribly upset about the iPhone price drop. It was a tad galling to have the price cut be so large so soon. On the other hand, I got to use a great device for a couple of months before the price cut. In my judgement it was worth the price when I bought it.

I traveled around several states on business and used the iPhone for getting maps, checking email, keeping up on news via Safari and watching videos on the airplane. If I was a savvy shopper I could have waited a while and waited for a price cut. To me the utility of the device was worth the few extra dollars so I don't regret it.

On a more philosophical level, it is curious why the price cut comes now. Sales seemed to be OK. Why not wait until November to cut prices? That would still capture the Christmas buying surge. My private guess is that Apple's competitive research turned up something causing them to accelerate the price cut. Apple is conservatively run. They would normally keep the price high. Even if they did cut the price a more typical approach would have been to drop the 4GB model and reduce the price of the 8GB model to $499. I suspect they knew of a competitor entering the market and wanted to be sure to lock up as many sales as possible before that happened.

Hmmmm, could an iPhone competitor be on the way before Christmas? It's got some pretty big shoes to fill because Apple has raised the bar VERY high!

You Bet iGot A New iPhone And iMac, Baby!

If you invest in Apple, then you should be lovin' me right about now!

Yes, I love my Apple Macintosh gadgets and computers as I noted in my blog-tag revelations from the other day. I'm a very loyal customer because they have proven again and again that they consistently DELIVER on quality products that fit my business and personal needs.

So when the new iPhone came out a few months back, it wasn't a matter of if but when I would have one. I held off for a bit to see if there were any major glitches or bugs. Seeing none, I decided to plop down the $600 for the 8k version and get the minimum 200 text messages a month plan that they make you purchase for $20 in addition to the packaged plan I had with Cingular before AT&T bought them out earlier this year.

Personally, I don't use that many text messages in a YEAR, so it stinks that they MAKE you purchase a plan with text messages. Of the 200 I have available to use this month, I've sent and received a grand total of SIX! Yippee! But, the bright side is I have an iPhone and get UNLIMITED access to the Internet and e-mail as well as many other cool features.

My favorite features besides accessing the World Wide Web are the built-in camera that takes some of the most stunning photos that rival any digital camera I've ever used, the scrolling phone book which allows you to call or text anyone with the touch of a button, availability of YouTube videos without going online (although the selection is limited from what you would get on your computer), and the weather updates for any city in the entire world.

Needless to say, this thing is utterly amazing and worth every penny I spent on it. It's a great tool for anyone who uses the Internet for business and travels a lot. When I was away in Indiana a couple of weeks ago with ZERO access to the Internet, my iPhone kept me in touch without a glitch.

Getting used to the keyboard which is all digital was a bit tricky at first, but it gets much easier the more you use it. This is the best cell phone I've ever held and I think AT&T is gonna see a HUGE surge of customers when Apple decides to lower the price down a bit.

The iPhone can be cost-prohibitive for most people who can't justify the expense in their budget. But this is a real MUST for anyone who needs to keep track of their e-mails, watch their stocks, get directions using the map feature, mark their calendar with special events, chat with co-workers via text message or phone, and other such activities while away from the office.

I'm addicted to this thing and am lovin' every minute of it!

The other thing I'm diggin' right now is this brand new iMac I'm typing this post with. Compared to that dinosaur iMac I bought about ten years ago, this thing is light years ahead of where I was. It was a long time coming, but I finally got the computer I have been needing for both my personal and professional computer needs.

This thing has EVERYTHING I could ever want in a computer, including a cool built-in camera that I've already had some fun with taking photos using the various tricks and angles available with the PhotoBooth program. Check out a few of them below:




Yes, I know I'm having too much fun, but that's my new iMac, baby! This thing plays DVDs and even lets you record videos which I am thinking about using to post videos to YouTube about livin' la vida low-carb since my buddy Kent Altena stopped doing his wonderful low-carb video series earlier this year.

There's even a built-in microphone for me to record my podcast shows, which you will hear for the first time in Monday's Episode 79 of "The Livin' La Vida Low-Carb Show with Jimmy Moore." Tune in and see how much better the audio quality is with this iMac compared with what I had previously.

Owning this computer is a dream come true and I'm happy to have both my new iPhone and my iMac! Let me know if you have any specific questions about either system. I'd be happy to respond with my personal experience.