This post originated from an RSS feed registered with Ruby Buzz by Mike Shoemaker. Original Post: An Open Letter to Steve Jobs Feed Title: Unruly Rambling (ruby category) Feed URL: http://www.shoesobjects.com/blog/rss.xml?category=ruby Feed Description: My thoughts on software, technology, and life in general Latest Ruby Buzz Posts Latest Ruby Buzz Posts by Mike Shoemaker Latest Posts From Unruly Rambling (ruby category)

First off Steve, I highly doubt this was a decision made recently. My guess is that this twist was in the playbook a while back, probably pre iPhone release.

With that being said, this is brilliant marketing. By lowering the price by 1/3 or $200(really $100 since my argument is that the overcharged on purpose knowing this was coming), Apple expands the target base of potential iPhone owners. The $100 Apple Credit to early adopters takes those that were already enamored by Apple and it's products to a new level. I know several folks with an iPhone and I haven't heard a single one of them complain about the price after they purchased it. By giving these fanatical people a free $100 credit(in their mind), they will likely be sold on Apple and their products for a lot more than just the iPhone. Think of all the people that are PC users that bought iPhone at $599. The Mac Mini price point of $599 might be a good option for those in the market for a new computer with a $100 credit. Assume that this occurs and some small percentage of people buy a Mac Mini and eventually join the cult. This is the gift that keeps on giving.

Now, what was the risk in pulling this off? The only thing I see is less iPhone sales during the launch due to the inflated price. Since Apple has a cult like following, this risk is lower than it would be for the average company. In other words, some people will buy Apple products because of their brand loyalty without regard to price or competitive pricing logic. The functional quality and head turning beauty of the iPhone was bound seal the deal for another large chunk of the risk factor audience. Finally, if all else failed, Apple certainly had the media hype going and could have triggered this price reduction early on to salvage any hit that they took.

Since I'm not a marketing guy, tell me where I'm wrong...

Here is the link to the document that inspired this late night post.
An open letter to iPhone owners from Steve Jobs