Feeling kind of smug…
This morning, I’m feeling kind of smart, or at least a bit smug, given the news on the $200 price cut on Apple’s (AAPL) Iphone. As footnoted regulars may recall, I gave up on the Iphone shortly after experiencing numerous problems. It’s now clear that I couldn’t have been the only one since you don’t cut prices by 33% only two months after the product is released if it’s really flying off the shelves, now matter how hard Apple tries to spin it.
And spin it they did, judging by this Q&A that ran in USA Today. I particularly liked the part where Steve Jobs said Apple customers who had paid $599 for the Iphone were the victims of technology. As one of those people who plunked down $599 for the Iphone, I know I wouldn’t have felt that the two month advantage was worth an extra $200 (not to mention the cumbersome two-year contract on a sloooooow network). And, judging by the stock this morning, investors are also not taking the news too favorably. Om Malik has some details here on how to get the $200 back. Om, by the way, admits to feeling “shanked by Jobs” for paying the extra $200 for the device.
Of course, you know you’re in full spin mode when the Iphone price cut isn’t mentioned until more than an hour into Apple’s news conference yesterday, when Jobs finally gets around to discussing the price cut. But first you have to listen to the details (and lots of clapping) of new ring tones, new colors for the Ipod Shuffle, a few other things and the announcement of the new Ipod Touch, which actually does seem kind of cool with the mobile WiFi, assuming it works the way Jobs says it will in the video, and the deal with Starbucks (SBUX). With no 8-K to fall back on (at least not yet), investors are forced to glean the details from the video and the other coordinated coverage.
So apologies for feeling kind of smug this morning. I already got my $599 back. Now, if only I could get the day I spent waiting in line for the Iphone back!
UPDATE: Steve Jobs gives a mea culpa to the early adapters and promises a $100 credit, noting that “he received hundreds of emails from Iphone customers who are upset.”
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September 6th, 2007 at 11:58 am
Apple does this kind of thing ALL the time. The product life for an Apple product is about 3 months. It is why I switched from Apple to PC in early 90’s. Nothing like plunking down thousands only to find out in 2 months there wasn’t enough memory for the machine you bought and you should buy this newer Apple. You can already feel it with the ipod touch; 16GB & play big video files. That isn’t enough memory. The mantra with Apple is “You buy your way out of problems.” For those that can afford it, Apple sure is a nice alternative.
September 6th, 2007 at 7:53 pm
so mean michele. Give apple another chance my lady.
In new york next week…drinks?
September 7th, 2007 at 5:34 pm
This? On a blog about footnotes to financial statements? Apple didn’t do anything wrong, or even anything that surprising.
Everyone should expect the prices of technology to drop. Most people do. The tech products you buy this year will be better and cost less than the tech products you bought last year.
What happened to the invisible hand? If the price is too high, don’t buy it. If you decide the price is right, and buy it, then the price someone else pays tomorrow has nothing to do with your purchase. The shame people feel at paying too much is a personal psychological reaction — perhaps the inverse of smug, but no better or worse.
By all measurable indications, Apple’s iPhone sales are going very well, and their price drop should be recognized for what it is — an aggressive move to sell many more phones at a profit.
You WAITED IN LINE for the phone. How can you say the price was too high? If it were too high, why would you line up to get one first? Doesn’t that strike you as preposterous?
I cringed when I heard journalists’ frenzy over this price cut, but that’s what journalists do. This is a blog that soberly investigates financial statements — I didn’t expect any discussion of Apple’s price cut, let alone one that doesn’t have much to do with accounting, finance or economics.
The story here, from a financial perspective, is how this market sell-off likely has very little to do with Apple’s fundamental business, and much more to do with the behavior of a panicked herd.
Time will tell.
September 7th, 2007 at 6:41 pm
Fair enough, Paul. As for whether the post was appropriate on footnoted, I do stray from the filings every now and then to talk about other stuff and since I had written about my personal experience with the Iphone, I felt it was fair game.
Had Apple put out an 8K, I might have commented on that. But since they didn’t, which in itself seems somewhat unusual given the carefully orchestrated campaign yesterday, including multiple interviews (WSJ, USA Today) and an hour-long video, there was no filing to rely on.
February 15th, 2008 at 6:51 am
Everyone should expect the prices of technology to drop. Most people do. The tech products you buy this year will be better and cost less than the tech products you bought last year.
The story here, from a financial perspective, is how this market sell-off likely has very little to do with Apple’s fundamental business, and much more to do with the behavior of a panicked heard.