The blogosphere has been abuzz these past few days in response to Apple’s move to cut the price of the iPhone by a full $200. After only releasing the device just a couple months ago.
Reaction was strong and swift, on both sides: After Steve Jobs’ personal inbox was flooded with hundreds of angry emails from early adopters and Apple brand fanatics, he publicly apologized Wednesday, and offered a $100 rebate to all the affected the line-standers. Apple and AT&T also said Wednesday that customers who purchased their iPhones at one of their stores within 14 days of the price cut will be eligible for a full $200 cash refund.
This gambit, though, may also be a little disingenuous: Consumers have to visit Apple’s online or physical stores to redeem their $100 store credits. (And we all know how easy it is to get out of the store spending just a hundred bucks…). Public relations black-eye aside, what does this signal not only about this semial mobile device, but about the future of mobile marketing as a whole?
Now, Jobs insists that Apple remains on track to meet its previous goal of shipping a million units by the end of the month–leading us to keep seeing his vision of the future. But no sales data at all has been released since the company announced that it sold 270,000 iPhones during the product’s first 30 hours on the market.
Instead, Jobs contends that the price cut reflects, in part, Apple’s ability to reduce production costs, as well as a desire to price the iPhone attractively during the holiday season. “It’s time to be as aggressive as we can be,†he said. “If we’re not, then we have to wait another year for the next holiday season.â€
That’s fair. But while technology companies often drop prices on their gadgets over time, Apple has historically introduced replacement models with different industrial designs and improved features rather than discounting existing models. And they usually make these kinds of changes about a year after a product’s introduction; not two months later.
But, again, the bigger issue here—from a mobile-as-the-future-of-entertainment standpoint—is what does this say about the revolutionary potential of the iPhone? Especially insofar as this price slash comes on the heels of the introduction of the next-gen iPods, which feature the same high-tech touchscreen technology that makes the iPhone special. So given that convergence devices have historically tanked, what’s stopping consumers from snapping up the nifty new iPods and sticking with their trusty and cheap RAZRs?
The short answer is nothing. Especially when you consider that Apple is also facing an onslaught of competition from other handset makers—featuring steadily improving iPod-like entertainment functions, at a fraction of the cost. To say nothing of the pricey and restrictive two-year plan AT&T requires you to commit to for the privilege of having the latest in mobile technology.
Undaunted, Apple has said that it intends to sell 10 million iPhones by the end of next year, giving it a 1% share of the global cellular handset market.
But what does this really mean? Unfortunately, none of us can say for sure. iPhone reviews—both professional and consumer—have been mixed, and very little press has been awarded to the device post-launch. Sure, you see a few of the handsets around town; but typically they’re being used for what most phones in the U.S. are being used for: talking.
Don’t get me wrong—I’d love for the iPhone to change the game. It would give me so many more interesting options and opportunities as a mobile marketer. But judging by the numbers (and that’s invariably the best judge), we’re not off to a great start.
Mobile video and music? It’s coming, I promise. But for now, let’s talk about your latest SMS campaign.
