Apple Wins Again: Dust Settles on the iPhone Controversy

The blogosphere ran rampant on the heels of Apple's day-after announcement of a $100 store credit for early iPhone adopters. The range of emotions was wide, but most saw the move as reactionary, a surrender, a shame. Personally, I couldn't disagree more.

Credit Steve Jobs with yet another brilliant move. In his apology letter, Jobs explains what I penned less eloquently yesterday: "There is always change and improvement, and there is always someone who bought a product before a particular cutoff date and misses the new price or the new operating system or the new whatever. This is life in the technology lane." Early adopters know and expect this. The $200 drop seemed so extreme because Apple did such a masterful job of justifying iPhone's initial price tag a couple months back. Early adopters weren't upset to be out $200, they were upset that Apple itself had called into question the value of their baby!

So the initial, short-lived backlash aside, where does the dust settle on Apple? What have they won?

1. When iPhone II launches next year, early adopters won't be afraid to fork over the cash, because they trust Jobs will treat them fairly should the price decline.

2. Jobs and Apple turn a PR nightmare into a PR success by showing the company has a heart that beats only for its customers.

3. Apple STILL walks having successfully price-discriminated its user base, extracting and extra $100 from each early adopter.

4. Apple is rewarded with not 1, but 2-3 days of heated media coverage (not to mention years of case study discussion at the world's top MBA schools).

5. Apple gets to explicitly communicate iPhone as the perfect holiday gift early, reminding shoppers to stash away that extra $399 by December.

6. Many recent purchasers will claim the $100 rebate, not realizing they're actually entitled to $200.

7. The $100 rebate is in Apple store credit- ensuring return business and potentially INCREASING sales!

Many have assumed the rebate wasn't planned, but I for one wouldn't be surprised if this is yet another beautifully choreographed, albeit unconventional, Steve Jobs presentations.

No comments: