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Who among us has not regretted the purchase or the newest high tech gadget because only a year / month / week after they bought it they found out that something much cooler had been built to take its place and what they now owned was passé and therefore much cheaper than what they paid. Why then do Apple iPhone buyers feel especially entitled to get all in a huff about the recent price drop of the iPhone?
The loyalty they feel towards the Apple brand may play a big part in this. They could expect this kind of behavior from their other technology providers but from Apple?!?! How could Apple do this??? Apple’s customer are so loyal that they will let slip ups in hardware slide because they believe in what the company stands for and they like the simplicity of the tools it provides. (Before I was an iPod user it was beyond me that my friend would go out and buy another iPod after her battery died. Now, I understand.)
The truth is Apple usually tries its best to fix the problems that it has created. They are throwing a $100 store credit at the early buyers of the iPhone to make up for their hurt feelings. (Think: boyfriend buying you flowers for arriving late to dinner - doesn’t do much but makes you feel pretty good.) I personally am blown away by Apple’s generosity. The people who went out to buy the iPhone first so that they could have it before anyone else had to have known that they were going to be paying more than what people in the future would pay. So what if the future arrived a little sooner than expected? You don’t see me crying my eyes out that I spent $200 on a MiniDisc player that was made completely obsolete upon the arrival of easy CD burning and Mp3 players.
It seems that the loyalty that Apple instilled in its customers backfired momentarily when they made this price drop. They feel like they’ve been tricked by a close friend which hurts more than being tricked by someone that you would expect it from. No one kicked and screamed when Motorola dropped the price of the Razr from $499 to $99 over the course of 2005 (New York Times). It seems that most users will take Apple’s indiscretion in stride (accept the $100 bouquet of store credit and wipe away their tears). My question to you is this: did Apple really need to pony up the dough? Didn’t the iPhone buyers get what they paid for - the newest, coolest phone first? Isn’t that worth $200 big ones?
Filed under: Technology, Technology Strategy
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You are right on Chris! I absolutely agree…when we purchase tech, we are freely choosing to pony up the $$ for the satisfaction of having the goddie right then and there. Regardless of future prices. I could see Apple’s credit applicable if they somehow had deceived loyal users, nevertheless, Apple hyped this baby and consumers swallowed the bait whole. Lesson to learn: Delay just a bit of the infantile instant gratification so prevalent in our culture and such patience might just “pay” off (pun intended). Otherwise, quit yer bitchin!!
I wish I were the bright person who wrote this article, but it was actually AHLLC staff member, Dani Sevilla! Thanks, Dani!
The real reason for the price drop is that Apple didn’t think they would move enough units at the exorbitant price level. Also, no one was buying the half storage one (4GB) so they eliminated that.
The stock tumbled on a day that also introduced the new ipods. Not a really good sign.
You’re right, Taylor.
Apple needs to push through a million units. While their stuck stumbled a little upon this price-adjustments, they would have tanked if Apple didn’t make its numbers.
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