Apple Makes The Right Call On iPhone


News of an iPhone price-cut took just about everyone by surprise, not the least of whom were the 270,000 iPhone buyers that first weekend they went on sale, many of whom stood on line for endless hours to plunk down their $599 for device.

So imagine their consternation when in the midst of yesterday's big Apple iPod roll-out,Steve Jobs pulls out a big ace up his sleeve: plans to slash the iPhone's price by a whopping $200, just 68 days after the thing went on sale. Let the email torrent begin; voicemails; phone calls with friends and acquaintances not just angry, let down and disappointed, but frankly pissed off that a company they love would treat them this way. And that's about the nicest language I can use here.

Amazingly, Steve Jobs apparently got the message too. By the hundreds, at least according to an open letter to the Apple community that he released just before the market closed today: Apple will now offer a $100 rebate to ALL iPhone owners, including those who bought the device at AT&T stores as a way to do right by its customers.

Says Jobs in his note: "Even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price."

Apple shares, which plunged on the news yesterday, and extended those losses through much of today, finally turned positive just moments before the letter was released. Now, as you might expect, the stock has returned to the red as analysts start doing the math, and revising targets to eliminate that $100 from about 750,000 iPhones sold at that original price. (That's an estimate. It could be more since we're already past the first week of September and Jobs said yesterday the company is on track to sell its millionth iPhone by month's end.)

But stop and consider the other side of this coin: No lengthy hand wringing about what ought to be done. No arguing, no delays about implementing the right thing. I said to colleagues yesterday and today that at the very least, I expected Apple to offer existing iPhone customers something like a $50 gift card to iTunes. Something. Anything. I just didn't expect them to do it so quickly. And by any measure, that's impressive. Jobs says in his note that he read every one of those emails and there were "hundreds" of them. You know what? I don't believe he read every one, but that's not the point. He read enough to do the right thing.

And that's impressive. Tech moves fast. Prices fall. It happens. Always has. Apple's proving today that as fast as tech moves, and as fast as prices fall, the company is more than ready to keep up. And do the right thing.

Questions? Comments?