Tech Check

Apple's iPhone: Readers 'Ringing' In My Ears


As you might imagine, the Apple news and iPod releases generated enormous interest this week, and then the news cycle kicked into overdrive yesterday with word of Apple's plans for a $100 rebate to all existing iPhone owners who bought the thing at full price just two short months ago.

I've been getting a lot of email about all this, so I thought I'd print a sample of some and offer up some answers. So here we go:

Sandi Matthews writes: "I purchased an iPod that was shipped on August 27 now on September 5 Apple releases the new iPods and you can purchase 8 GB for the price I paid for the 4 GB. What options do I have with Apple?"

My suggestion is to go to an Apple store, with receipt in hand, and see what they might offer you. Worst comes to worst, since you bought it so recently, just return it for a full refund and buy the new versions when they come out. Who knows, Apple seems to be in a charitable mood this week. Never hurts to ask.

Paul Comei writes:
"As a long time Apple/AAPL stock holder (1996!) & CNBC viewer it's a pleasure to see/hear/read your constant fair & truthful reporting about 'Everything Apple'! Most of your on-air co-workers don't seem to have any ethics/morals when reporting 'Anything Apple'! I wish you the best in the future & hope some of your excellent values/character traits will rub off on a few of the other CNBC crew members."

Paul thanks for the kind comments but I'm honestly just trying to be realistic and offer some reasonable analysis. As far as the rest of my colleagues, you're entitled to your comments but I respectfully disagree. Everyone's got different opinions on all this stuff, and its one of the key reasons why one of the "C's" in CNBC could stand for "compelling." That's what makes a market fun!

Jack Williams from Big Bear Lake, Calif. writes in:
"As a recently retired technology entrepreneur, Apple’s unexpected marketing acceleration has all the hallmarks of an all-new product whose birth launch was surprisingly smooth in terms of manufacturing ramp-up, follow-on glitches and support. Coupled with positive owner response, Apple realized it was possible to produce and sell a lot more units than the conservative original plan. The $200 price reduction stings a bit in a home with two iPhones, but the sting is gone with Steve’s very prompt letter and rebate. As a 4,000 AAPL shareholder, this is going to pay off."

Jack, you're not alone in your thinking. I think that's the conventional wisdom on Wall Street, but we'll have to wait until Oct. 24 when Apple releases its current quarter earnings.

"Wkeely," a prolific letter-writer, was angrier:
Apple and Steve J. hosed the investors/shareholders yesterday. He led us to the slaughterhouse and his magic show sucked. I'm tired of his BS every time he has a special event day the stock tanks!"

It's true: there's usually a huge run-up in shares leading up to these events (about 12% this time from the day the event was announced until the day itself) and then we saw the "sell on the news" reaction when Jobs was done speaking. But if you have an inkling that that kind of activity happens EVERY time, or NEARLY every time, then.

John Blocha writes about the rebate:
"No big deal to Apple! It will cost them less than $ 1 million. I have an I-phone and was not expecting money back. I am really waiting for some upgrades and new applications. Some of this needs to come from AT&T and I believe they will respond to market pressures for an improvement in Edge performance. The price drop was a smart, strategic marketing move. It put a lot of pressure on NOK and MOT. In the end we all benefit from this competition."

I agree, but your math is off a bit. Piper Jaffray for one estimates that the rebates will cost Apple about $85 million, or roughly 2% of operating income.

While I'm thinking about it, if you get the chance, check out Apple Discussions and you'll get a taste of the commentary that likely helped Steve Jobs make such a quick decision about the rebate. Gina wrote in to tell me that my constant references to Apple at an "all-time-high" on Wednesday was not accurate. I know, I know, I was a dollar or two off. Dumb mistake. Apologies. Same goes for John Nakata writing in to tell me that the Apple event was Wednesday, not Tuesday as I had written. Labor Day threw me off a day. Another stupid mistake.

Also, a clarification today coming from our friends at Supply, the market-research firm which earlier this week reported that the phone was the most popular smart phone sold in July, outselling all competing models. Supply should have said it was the most popular INDIVIDUAL device, but not a device that outsold all other competitors combined. In other words, RIM's entire line of BlackBerrys outsold the iPhone two-to-one in July, but the SINGLE highest selling device during that time was Apple's iPhone. iSuppli apologizes for the vague language that was open to some interpretation. I hope that clears up any confusion.

Have a terrific weekend, and please keep writing in. I enjoy hearing your comments, good and bad, about what I'm doing online and on the air.

Questions?  Comments?