Apple CEO Steve Jobs apologizes for iPhone price cut
While Steve Jobs announced he would offer a rebate of $100 (apple store credit) for those who paid full price for their iPhone, I would guess that most were not complaining about the steep price just 5 days ago. So, if it was a “good deal” then, what has changed ? Nothing ! If I want the coolest gadget, I know it will be cheaper in a few months. That’s the price of “cool”. At least two people quoted from a CNN.com article are being honest with themselves on why they bought an iPhone …
“It’s better than a dog, if you want to meet people,” Brin said of his iPhone.
“It’s the equivalent of having that season’s handbag,” said Shamama, who goes through cell phones as quickly as some people do shoes.
BTW – I don’t agree with the first quote but it is really funny because 10 years ago I actually knew three guys who got together and bought a puppy just to pick up girls. I felt bad for the dog because it wasn’t clear if it would get the caring home it deserved but one of the guys was a decent bloke so I stayed optimistic. … I never did find out what happened to the dog … or the guys for that matter. It was South Padre Island at spring break so they could be anywhere by now.
Didn’t seem like much of a apology to me… at least not at this link…
http://fakesteve.blogspot.com/2007/09/this-comes-with-100-rebate.html
nor does the one he posted earlier on the same day entitled “Happy Now B*****es?
It’s almost like they’re two different people…
hmmm..
Did you know that Apple also has a hidden cost associated with iPhone acquisition? My wife just bought the lowered-price iPhone and tried to install it through her two-year-old iMac. After great frustration not being able to get it to work correctly (and she’s an expert-level user), she called for support and found that she would have to pay approx. $150 more to upgrade to the latest Mac O/S in order for the iPhone to sync correctly with her iMac.
Since I happen to be an expert on crisis management, I can say that crisis prevention starts with “no surprises” to your stakeholders. This surprise should spark another round of disgruntlement. Mac/Jobs has a rep for arrogance. It would have been smarter to talk to customers BEFORE slashing prices — that would have told him the probably reaction and they could have offered the rebates concurrent with the price reduction, turning it all into a “win win” with no apology necessary.
Jonathan Bernstein
President
Bernstein Crisis Management, Inc.
There is irony in all of this. Apple could have left the price at $599 for another 5 months and the general consensus to the price cut would have been “it’s about time”.
I guess it turned into a lose-lose situation. There must be a marketing lesson in this somewhere. I’d love to see it as a HBS.edu case study.
Certainly Steve Jobs planned the price increase from the beginning. Alot of you must know this is probably true.
He knows that Apple has a large number of “cult follower”-type customers, and he knows that most of them are generally fanatical and will remain loyal to Apple, as long as he keeps inventing amazing technological devices. Therefore, he had a very high initial price on the iphone to grab the money from these fanatical followers. He also knew, after a period of time, the only customers left would be more rational people who wouldn’t be interested in “chopping their own arm off” to be the first to own an iphone.
Thus, he lowered his price for the next stage of buying, and then he pretends to be a “generous guy” by offering them a refund of $100.00 (of store credit). Obviously “store credit”, still guarantees him no loss of profit, and this was certainly planned from the beginning as well.
I think all this reveals the “true colors” of Steve Jobs, but the only people this has meaning for are his “fanatical followers”, who have a chance to see that Jobs has three primary “roles” as the CEO of Apple:
1) He’s an innovator
2) He’s a business man
3) He’s an actual cult leader
And the only people who have proved the third point are his “followers” who continue to let Jobs take advantage of their money, while they simultaneously defend him.