Steinblogger

I’m one of the “early adopters” stung by Apple’s price drop on the iPhone, which adds up to $400 in my family. Apple’s $100 store credit gesture is nice, but necessary only because the early adopters of the iPhone are mostly Mac owners.

Apple is competing in a new category and needs to compete in a new way, while its core early customers for the iPhone are Mac users that expect Apple to act like Apple Computer, Inc. rather than as a cell phone producer. If Apple behaved like Apple Computer, Inc., it would keep the prices fairly static, shipping new models with new capabilities to keep the prices in place. At the least, it wouldn’t drop prices by a third within the first year or so.

The Motorola RAZR is a great example of how the cell phone marketplace works differently than the computer marketplace. According to the NY Times, the RAZR was released at $499 (yes the same price as the original 4GB iPhone) and was $199 six months later (about 60% less). Within 12 months it was $99. That’s a perfect illustration of how pricing works in the cell phone world. Don’t expect to see iPhones for $99 anytime soon, but don’t expect Apple to give a gift certificate every time they drop the price, either. That’s a one-time gift to us early adopters.

Personally, I’ve gotten at least $100 of value from my iPhone in the last two months. So, I’m good.