News

Woz Bags on iPhone Price Cut

Monday, September 24th, 2007 at 8:50 AM - by

Apple co-founder and technology legend Steve Wozniak recently called Apple to task for its sharp iPhone price reduction and the way the company has handled early adopter refunds. He felt that Apple dropped the price of its combination iPod and smart phone too much too fast, according to ITNews.

Apple dropped the price of the 8GB iPhone from US$599 to $399 only 68 days after the product launch. The company also discontinued the 4GB version of the phone. Mr. Wozniak commented "Nobody expects a product to drop that much in price in such a short time."

"The first adopters always pay a premium. I am one of them. I am used to that" he added. "But that one was too soon, too harsh."

After Apple dropped the price of the iPhone by $200, Apple CEO Steve Jobs responded to angry early adopters with an open letter stating that they would be eligible for a $100 credit at Apple's retail and online stores. The procedure, however, requires that the iPhone has already been activated, and if the phone was given away, whoever is using the unit gets the store credit -- not the original purchaser.

"If I bought it and gave it as a gift they get the discount," Mr. Wozniak said. "Why don't you just take my receipt and give me the money back? And of course it always comes back to Apple Store credit."

He estimates that he has purchased about 20 iPhones so far for himself, friends, and family.

Despite his disappointment with the way Apple handled iPhone pricing, Mr. Wozniak is pleased with the handheld device. He called it the first smart phone that takes a "human approach" to usability.

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burrito said:

member since 07 Aug 2005 with 176 posts, unranked, send him a message or view his profile

Mon Sep 24, 2007 9:12 am

i'm personally sick of hearing about the issue. most actual iphone owners i know aren't terribly pissed off about it. i can understand why some would be, but seriously.. at this point, it's beating a dead horse.

oh, and woz, if you have the kind of money to throw down on 20+ iphones as gifts for friends and family, then it's really no big to you to begin with. my coworkers who are making $8 an hour in food service are the ones who have room to complain, and yet most of them don't.

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A guest said: (hide)

Mon Sep 24, 2007 9:32 am

I think the man's complaints are valid regardless of how much money he has.

Is someone with wealth unable to comment on issues of price? Seems to me that makes his comments that much more valid.

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A guest said: (hide)

Mon Sep 24, 2007 9:51 am

the !!! $100.- !!! price reduction doesn't bother me near as much as the dread that Apple will drive a spike through the heart of useful tools like the AppTapp Installer and the functionality it enables.

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geoduck said:

member since 30 Dec 2003 with 1739 posts, unranked, send him a message or view his profile

Mon Sep 24, 2007 10:17 am

I do agree with one point though. As Apple moves out from it's original Macintosh base, I've felt a 'corporateness' creaping into its behavior. Not anything massive and I think the way SJ jumped up and added the $100 credit for early adopters is an indication that there is some of the old spirit there. But I'm feeling that Apple is more of a Big Business, than it used to be. There's a subtle degree of callusness that I hadn't notice in the past.

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yakirz said:

member since 22 Nov 2002 with 449 posts, unranked, send him a message or view his profile

Mon Sep 24, 2007 10:23 am

I don't need to hear that the "price was reduced too sharply" from someone who can afford a new iPhone everytime the last one fills up.

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A guest said: (hide)

Mon Sep 24, 2007 12:17 pm

It makes sense that the discount applies to the iphone owner and not to the original purchaser. This way they discourage ebay resellers who look to make a profit on an under-stocked item. Why let those resellers have the 100 buck credit?

Besides, if you bought the phone for your friends or family, it may be safely assumed that you like them enough not to be bothered about them benefiting from the discount. It's like an added & totally unexpected gift!

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A guest said: (hide)

Mon Sep 24, 2007 12:21 pm

Guest wrote:
the !!! $100.- !!! price reduction doesn't bother me near as much as the dread that Apple will drive a spike through the heart of useful tools like the AppTapp Installer and the functionality it enables.

Actually, it's a $200 price reduction. It's only a $100 price drop if you activated your phone within the timeframe and were planning on purchasing over $100 worth of Apple products in the near future. Not something many people were planning on doing just 68 days after after dropping $600 on Apple products.

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A guest said: (hide)

Mon Sep 24, 2007 12:24 pm

Guest wrote:
It makes sense that the discount applies to the iphone owner and not to the original purchaser. This way they discourage ebay resellers who look to make a profit on an under-stocked item. Why let those resellers have the 100 buck credit?

Besides, if you bought the phone for your friends or family, it may be safely assumed that you like them enough not to be bothered about them benefiting from the discount. It's like an added & totally unexpected gift!

I disagree with you and agree with Woz. The point of the credit is not to satisfy iPhone owners, especially those who didn't bear any financial burden to acquire one. The point of the credit is to alleviate the grief that Apple caused people who were swindled into being early iPhone purchasers, those that actually gave too much money to Apple.

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A guest said: (hide)

Mon Sep 24, 2007 12:53 pm

While the price drop may be seen as a very harsh move on early adopters, it can hardly be called swindling. When you evaluate a product's features & are willing to pay the asking price, you tacitly agree to its fairness. Every technology product is bound to suffer price reductions at some point. The only problem here is that to many people's perceptions it happened too soon, too fast. Also, I still don't see the problem with the owner claiming the discount. I mean; if my uncle Woz decided to give me an iPhone for my birthday, I'd be more than happy to let him have the credit. The only problem I can think of would be with lost or stolen iPhones.

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A guest said: (hide)

Mon Sep 24, 2007 1:38 pm

Guest wrote:
[It's only a $100 price drop if you activated your phone within the timeframe and were planning on purchasing

which is likely most of the purchasers, and I've already got an iLife Family pack with one credit & will use the other for part of the cost of the Leopard purchase.

Little cost to Apple but savings to me. Let all the gripers stew in their bitter juice!

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Bosco said:

member since 03 Jun 2002 with 999 posts, unranked, send him a message or view his profile

Mon Sep 24, 2007 1:44 pm

People who want to spread pain equally annoy the hell out of me. What a bunch of whiney losers. Sing with me Woz... This is why, this is why, this is why you're not Steve Jobs. I cannot believe that there is a single iPhone early adopter who isn't ecstatic that their friends, wives, husbands, life partners, gurus, and errand boys can now more easily afford an iPhone. It makes you wonder whether Woz would explode all over K-Griff if Apple dropped the AT&T requirement.

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Black_Dog said:

member since 18 Apr 2007 with 20 posts, unranked, send him a message or view his profile

Mon Sep 24, 2007 2:22 pm

With all due respect to the legendary Woz, but who cares what he thinks about this? He is a techie, not a business guru or marketing maven. His opinion on this is completely irrelevant and doesn’t merit the press that it has gotten.

If Woz knew how to successfully run a business or market a product… then he wouldn’t be sitting on the sidelines armchair quarterbacking his former partner – you know, the guy who knows how to market and run a successful business.

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A guest said: (hide)

Tue Sep 25, 2007 10:37 am

To Black_Dog. I'm not defending Woz, but you don't know what you are talking about. Woz has created a number of other companies. And makes more money than I'm sure you do, and also employs more people. Greenspan isn't a techie, a business guru, or a marketing maven. But his opinions on money (economics) matter.

And as for successfully marketing a product -- check out the technology you use in your remote control. I bet Woz had something to do with that.

And as one of the shareholders in Apple -- with all due respect, his opinion does matter. So does mine as a shareholder.

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Black_Dog said:

member since 18 Apr 2007 with 20 posts, unranked, send him a message or view his profile

Tue Sep 25, 2007 3:05 pm

Guest wrote:
To Black_Dog. I'm not defending Woz, but you don't know what you are talking about. Woz has created a number of other companies. And makes more money than I'm sure you do, and also employs more people. Greenspan isn't a techie, a business guru, or a marketing maven. But his opinions on money (economics) matter.

And as for successfully marketing a product -- check out the technology you use in your remote control. I bet Woz had something to do with that.

And as one of the shareholders in Apple -- with all due respect, his opinion does matter. So does mine as a shareholder.
Wow! So many factual errors and logical leaps…

First, Alan Greenspan graduated suma cum laude in economics from NYU. Later in life he was awarded a PhD in Economics from Columbia University and an honorary PhD from NYU. He worked at The Conference Board, an economic think tank, for 32 years prior to his appointment as chairman of the Federal Reserve Board, where he served for 19 years. I would say that this qualifies him as an economic guru and banking expert. But I wouldn't hire him to build a computer.

Woz is a brilliant electronics genius who has invented and developed many technologies that have helped to change the world. But, if it were not for the obnoxious persistence of Steve Jobs to obtain financing and market the products they co-developed, there would never have been an Apple. None of the companies or projects that Woz has developed on his own can be said to hold a candle to the success of Apple or any other top tier technology firm.

Whether my remote control contains technology that Woz created has no bearing on whether he is a marketing genius whose opinion should be broadcast by print and electronic media outlets. It is only evidence that Woz developed a technology that TV manufacturers utilized in their products. Do you really think Woz had any input in determining the retail price of my remote control? Or what it looks like? Or how it was packaged? Or how the manufacturer advertised it? Give me a brake.

Stock ownership in a company does not qualify one as an expert in marketing. Also, how much money any of us has earned is irrelevant to the determination of Woz’ qualifications to speak expertly on business marketing issues – unless that wealth was derived from demonstrated marketing acumen. Woz’ financial success is derivative of his technical expertise in partnership with another’s business savvy. Not from his own ability to set price and sell.

Ultimately, Woz’ opinion on how Apple chooses to price and sell iPhones is as relevant as yours… or mine, neither of which merits broadcast by ITNews.

(Edited for clarity)

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