There is never a dull week at Apple these days and the big story that has been debated everywhere is just why did Apple’s CEO Steve Jobs go ahead and agree to cut the price of the iPhone by $200, invoking a $100 rebate for those who had already bought it.
Investors in particular are trying to get a read on this. Did Apple overprice the device, slowing the sales? Did it always plan a price cut as soon as the new slew of Apples were out, or was Jobs waiting for retail stores to confirm that iPods are neither being cannibalized by the iPhone and that the iPhone is not cannibalizing iPod sales?
The war around the iPhone is becoming more intense and we feel that the margin was always a little too high in the first place. Apple perhaps realized that in order to defend its market share in the future, against new threats emerging in time for Christmas, it needed to accelerate the roll-out of iPhone and at the same time spruce up the iPod offerings. The $100 rebate for those that have already bought the iPhone is just good marketing sense to keep customers satisfied.
Now as Apple announces that it will sell over one million iPhones before the end of September, the smaller 4GB version in being phased out because everyone wants the top of the range device
Everyone we’ve talked to this week that has ever had dealings with Apple, worked there or met Steve Jobs, all had an opinion on the subject. Most thought that the price cut was pre-planned, even though Apple says it wasn’t, and many thought that it was the precursor to Apple launching new iPods now (which it has) and a 3G iPhone by November (in time for Christmas) but then why not do the price cut then.
Wily Apple watchers say that they have taken their iPhones apart and found a Broadcom chip that will serve both GSM and 3G, and say that the device is ready for a 3G radio. Well that’s pretty much how you design a pre 3G handset, and again, if Apple had the capability to introduce a 3G handset, it would have launched it first. Operators are crying out for a way to upgrade customers to 3G, and the iPhone would be a great reason. For those pundits to be right, the European iPhones must be 3G from day one. We’ll see.
The new iPods include one device that looks rather like the iPhone called the iPod Touch, featuring Apple’s multi-touch user interface. The iPod touch also includes wi-fi, the first on any iPod, with the Safari browser and Apple’s YouTube application and the new iTunes Wi-Fi Music Store which allows music to be downloaded over wi-fi without any need for a PC. It is 8mm wide, has a 3.5 inch screen and starts at $299, and can be used to view photos, and has a built-in accelerometer which automatically senses when it is rotated into a landscape position, The battery offers 22 hours of audio playback and up to five hours of video playback. Apple also cut a deal with StarBucks to allow access to the music store for free in US Starbucks stores.
Apple also added a nano with video playback with a 2 inch display and three bundled games with 24 hours of audio playback or five hours of video playback on a single charge, and costs $149 for the 4GB and $199 for the 8GB version.