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iPhone price cut unfair to shareholders?

updated 06:55 pm EDT, Tue September 11, 2007

iPhone price cut/investors

At least one pundit investor thinks that the company's decision to drop the iPhone's price $200 was a slap across the face of not only purchasers of the device, but also shareholders. Writing for Seeking Alpha, Prashanth Cherukuri notes that while price cuts on consumer gadgets are not unusual, such a dramatic drop so soon is. "I think this negative publicity for iPhone is definitely a dampener for Apple. I, for sure will be doubly wary of buying an Apple product from now on, because they just do not seem to have any regard for their most fanatic customers, who swear by every product of Apple. [...] After all the murkiness is cleared, we'll know more about this price cut and the factors that influenced it, but for now, I am off to the Apple store to get my refund."

We previously reported that Apple's decision to credit early iPhone buyers $100 toward the purchase of other Apple products in an attempt to alleviate anger triggered by the massive 33-40 percent price drop enacted just 10 weeks after the device's introduction represents an about-face in the company's stance on such rebates. In fact, in 2003, Apple argued a Microsoft settlement that "fewer than 25 percent of customers redeem these types of vouchers." That criticism concerned Microsoft's $1.1 billion antitrust settlement, which consisted of vouchers worth up to $29.




by MacNN Staff

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Comments

  1. sixcolors

    Joined: Dec 1969

    0

    looser

    as if you weren't prepared to pay the full price when you bought the item. It's your issue not Apples.

  1. Zkatz007

    Joined: Dec 1969

    0

    hey investors

    Yo MOMMA's unfair to shareholders! OOOOoOohh, who's looking foolish now, biotch!?

  1. shawnce

    Joined: Dec 1969

    0

    Lets revisit this...

    ...next year.

    The price drop was done to accelerate sales this holiday season (that and likely to make room for a new top end model). If it works as expected any loss on margins (note money from cellular contracts could easily cover) will be made up for in increased volumes and more importantly word of mouth which give Apple free marketing, etc.

  1. PhotoBug

    Joined: Dec 1969

    0

    he has a valid point

    It is a big blow to Apple fans, one of apples biggest supporters are the ones who buy first like that... and to slap them the way they did is stupid, my faith in apple is a bit shaken as well and i didn't even buy an iphone.

  1. rvhernandez

    Joined: Dec 1969

    0

    Unfair to whom?

    I as a shareholder am pleased that they are lowering the price to gain marketshare. Who is this idiot?

    His argument for Apple taking a while to lower the price on the 1st gen iPod doesn't take into account that Apple didn't have buying power the way they do now. Really, this is a guy who is upset about the price drop and less to do with real AAPL shareholder's concerns.

  1. dliup

    Joined: Dec 1969

    0

    no point, no point at all

    When Razr first came out, it was $500. A few months later it was $300. Then the prices drop even further.

    Razr did not refund or credit any advanced purchasers.

    People paid the same amount of money for a Razr! iPhone in comparison, even at the introduction price is a great bang for the buck in terms of $ per technology and usefulness.

  1. chulitomio

    Joined: Dec 1969

    0

    yea!

    Dammit stop lowering the prices of stuff! I can't believe Apple! Keep! It! High!

  1. MacnTX

    Joined: Dec 1969

    0

    Give It Up

    The MSRP on the RAZR did NOT drop 33-40% after it had only been on the market for 68 days. Please stop using that inaccurate analogy as there is no proof of that anywhere.

    The iPhone's drop was indeed unprecedented as nobody seems to be able to show any actual proof otherwise...

  1. QualleyIV

    Joined: Dec 1969

    0

    Negative publicity my a**

    Has anyone ever heard the phrase "all publicity is good publicity" (or something to that effect)? Think about it for two seconds, if you didn't know that the iPhone was coming out after the initial media hype you SURE know that it's out now. What's more, Apple just got about a BILLION dollars of free press that screams "the iPhone is now $399". Money can't buy that kind of advertising. What's more, all of the early adopters (like myself) are getting $100 back, so anyone who isn't a complete fool is thrilled.

    Personally, I'm betting this is one of the guys who was talking about Apple being "doomed" when the share price was $12/share and is now pissed because he doesn't own it at its present value.

  1. climacs

    Joined: Dec 1969

    0

    waaaaah

    this shareholder is not complaining. I think Jobs has proven by now that he knows what he's doing, and shareholders have been rewarded quite well.

    Would you like a little cheese to go with that whine, Mr. Cherukuri?

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