It's not rocket science. We learned a valuable lesson from Steve Jobs in recent weeks. If a product isn't selling so well, and its cost seems to be its main prohibitor -- then, slash it's price significantly. That's exactly what Apple did, dropped the 8GB iPhone to $399, and gave $100 store credit to the crybabies who were early adopters and originally paid $599 for the device.
I must confess, initially we didn't think the iPhone would hold up to its predecessor's numbers. But by all accounts, it has not only exceeded expectations, but surpassed early sales activity of the original iPod. Go figure.
Of course the slashed prices made a major impact. But we also have to look at the third-party unlock software now out on the market, like iPhoneSimFree and iPhone Worldwide Unlock among others, that enables an iPhone purchaser who doesn't have AT&T service to swap out the AT&T sims card for their own carrier's. And while these are the best known in the retail sphere, numerous hacks for unlocking iPhones have been around on the Internets for a while now. Some work, some don't, and some don't even survive iPhone software upgrades--which often turn the unlock feature off.
Regardless, the iPhone is experiencing a healthy success. And while Apple may not have become the goliath of desktops and laptops, or even software, it's proving that handheld entertainment and communications devices is quickly becoming its forte. We'll just forget about its earlier flop that was the Newton, a personal favorite of mine. Looking back on the device now though, it was ahead of its time and has definitely become the blueprint for all PDAs and Smartphones ever since. And let's not forget how the company changed the music game either.
Sure, it may be Jobs' smoke and mirrors to some, but the truth is, the more the company innovates, the more successful it becomes. And the takeaway from that one is -- never let your company become a stalemate, otherwise new players will take your position. Apple may have written the book on that one, but it's also the sort of advice that companies like Google and Amazon hold to their core.
Related Stories: | Topics:Technology, technology + computers, Apple iPhone, Apple Inc., Consumer Electronics, Science and Technology, Technology |
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Recent Comments | 10 Total
September 11, 2007 at 12:24am by Oh Blah Dee Blah Dah
"If a product isn't selling so well, and its cost seems to be its main prohibitor -- then, slash it's price significantly. That's exactly what Apple did,"
This is completely WRONG!
How can you say "isn't selling well," when Apple reached its 1 million iPhone sales goal in 74 days of its 90 days goal, when the 90 days goal would have been a significant achievement by itself.
My interpretation of events is that Apple knew it was about to reach its 1 million sale goal when it introduced the new iPods, and, as Steve Jobs said, it decided to "go for it." Apple reached its first major iPhone goal, and then went for its followup goal: INCREASE MARKET SHARE.
The stock price fell on the $200 discount, because the unknowing, but "think they know it all analysts" proclaimed that Apple HAD to lower prices because it was not reaching its 90 day sales goal.
Jobs made the financial analysts look like FOOLs. He knew that he would announce the 1 millionth iPhone sale a few days after the new iPods were introduced, because he sees the iPhone sales reports EVERY DAY. He let the analysts make their stupid, erroneous interpretation of the $200 discount, and then he hit them between the eyes with the attainment of the 90 sales goal a few days later.
The emperors (analysts) don't have any clothes!
September 11, 2007 at 3:21am by Alvin Jones
I agree with the comment above. Where do you get that the price cut had a "huge" impact on selling 1 million iphones. How many iphones do you think they sold in the FOUR DAYS after the price cut? It's pretty clear to me that the price cut was for exactly the reason Jobs stated: to increase market share during the Christmas season.
Read some real apple news here:
http://www.aaplcentral.com
September 11, 2007 at 3:33am by Lynne d Johnson
Oh Blah Dee Blah Dah and Alvin Jones -- I completely see your point. And that's the reason that comments exist in a forum such as this.
Those 4 days were definitely the tipping point though. And you may not agree with me. (But I also take no issue with being corrected.)
BTW, the researches agree with you Oh Blah Dee Blah Dah:
The price cuts sparked some concern that iPhone sales were lagging, but JupiterResearch analyst Michael Gartenberg told eWEEK, "I don't think that's the case. It was probably built into its strategy long ago. It's fairly normal to see price drops, particularly when you initially sold at that high a price point."
If either of you have any insight on how you feel Apple got to the million mark ahead of projected sales forecast, I'd be interested in hearing. As well, how did Apple sell 1 Million iPhones?
September 11, 2007 at 8:38am by Alexis Brion
well, if cutting the price is wrong or not... I don't mind! The iPhone is cheaper, I'm happy!
September 11, 2007 at 9:38am by Jefffrey
"Oh Blah Dee Blah Dah and Alvin Jones -- I completely see your point. And that's the reason that comments exist in a forum such as this.
Those 4 days were definitely the tipping point though. And you may not agree with me. (But I also take no issue with being corrected.)"
Uh, we shouldn't have to correct assertions of fact from the "official" Fast Company bloggers. If you say something is definitely the tipping point, you should offer sourcing for such a strong assertion. Otherwise your contributions are just unverifiable opinions and better belong in the comments section.
We need to have some level of confidence in Fast Company bloggers that assertions of fact are more than just your opinion. Otherwise state your opinions as just that ... a completely acceptable course of action.
September 11, 2007 at 9:59am by Lynne d Johnson
Thank you Jefffrey, but since this is a blog and not a news report or feature story, it allows for opinions and assertions. That doesn't mean it doesn't have any factual information though. Please see the various definitions for blog here. Blogs offer people the room to work on theories and to harness the wisdom of the crowd to perfect them -- even journalists.
September 11, 2007 at 11:37am by Steven Harrell
I love this magazine, but this write-up it 100% inaccurate. Since Jobs has came back to Apple, can you think of one unsuccessful product they have put on the market? So-called "experts" always put their 2-cents in, but the only ones that are right, are the ones that say "this Apple product is going to be a hit."
September 11, 2007 at 2:39pm by Jeffrey
Lynne:
With all due respect I never said a blog wasn't a place for opinions or assertions. What I said was that when an opinion is asserted as fact as you did, "Of course the slashed prices made a major impact." we should know what has led you to make such an assertion. Otherwise put your statement in a form so we can see it is just your opinion.
And I don't need you to educate me on what a blog is. I have several of them and have blogged for years. But to return the unrequested advice, you might want to take a look at the definition of journalist.
September 11, 2007 at 4:50pm by Lynne d Johnson
IBC Daily News Sunday 9 September 2007
Apple makes iPhone error, says Wozniak
by Kate Bulkley
Stephen Wozniak, the co-founder of Apple, told The IBC Daily that he thinks Apple's decision to drop the price of the iPhone by up to 50% only two months after it went on the market was "an accidental error" and that he "hasn't talked to anyone who thinks it was a good idea." The man who is often called the "other Steve" in reference to his more high-profile friend and Apple co-founder Steve Jobs, Wozniak said he "feels badly" about the early price cut because of all the people who had only recently shelled out $600 for the new iPhone. "My opinion about why they did it is that they have a large inventory and they are set up to build more than they have sold by a bit and they have to keep things moving," said Wozniak. "It happened to every technology product with the price coming down -- but you don't expect it to be two months, you expect it to be at least a year."
Wozniak was honoured on Friday with IBC's 2007 International Honour for Excellence, for pioneering change and making technology accessible to all. The Award was presented by IBC Chairman, Michael Bunce.
September 15, 2007 at 3:05am by trai_dep
Woz, adorable and historic figure, yes, is out of the loop. Even during his tenure at Apple, his forte was more on the engineering & manufacturing, less marketing or strategy. So while he's monumental, I'm uncertain how germane his iPod pricing critiques are.
It's my belief that, with the iPod Touch fast approaching, Apple felt that there were enough people interested in an iPhone without the "phone" features - an iPod Touch, in other words - that a price drop was warranted. With that segment gone, their marketing plan needed tweaking with the Sept iPod rollout. Proactive. Brilliant marketing and savvy understanding of the market.
(and yeah, saying the iPhone's price drop was because of poor sales is poor reporting - we expect more scepticism to often-wrong analysts. Media's role is (should be, rather) to fact-check these analysts, especially regarding the accuracy of what they've said previously)