Quote of the Day: iPhone

This post to Dave Farber’s IP list sums up nearly all of my feelings on the iPhone pricing issue:

"I find this discussion more than a little appalling.

Nobody forced anyone to buy an iPhone. The hype was immense, and only a little of the hype actually came from Apple. The buyers weren’t buying a phone, they were buying status and the envy of others. Every buyer got the opportunity to show off their new toy, brag. The iPhone provided a high quality narcissistic supply.  Now that the price has been sullied and the status is gone you can hear the sound of egos deflating as that brief bubble of exclusivity popped. The dealer cut the price of their junk.

In a Tokyo hostess bar a woman will sit at your table, talk to you, pour your drinks, listen to your problems, and boost your ego.  $200 typically buys one evening,  two if you scrimp a little.  Compared to that the iPhone early adopter premium is a bargain, and no hostess bar gives a discount on future purchases, ever.

Now that the iPhone is no longer a source of narcissistic supply, it can be judged on its own merits.


Michael Slavitch
Ottawa Ontario Canada"

The only thing I would add, as we have previously noted, is that of you buy 1.0 of anything, you are often a sucker or a fool. In the present case, both.

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  1. Miki commented on Sep 7

    sad, mean, harsh….but true! almost all the people who I know who had an iPhone, would never put it in their pocket, they would just hold it in their hand and show off. well now those times are gone. personally i think this was a good move for apple.
    I almost certain that you can already download software that allows you to work the iPhone on other service providers (if cant, its about to come out), AND the price is down. I actually think this will boost sales, cause before, the only risk to iPhone sales was the fact that they were trapped with AT&T and the high price. Now both of those are eliminated.

  2. Analyst For Hire commented on Sep 7

    I have never thought of iPhone as a substitute for Tokyo hostess. It should save me a lot of money during my next trip.

    I need to see a shrink. Maybe I should buy an iPhone instead and save on my medical bills?

    By the way, short all tech and AAPL!

  3. GerryL commented on Sep 7

    I understand that when you buy a new technology the price will be coming down. However, it is surprising how quickly Apple lowered the price. Also, this is a huge discount after just two months. Despite what Jobs said it must not be selling very well.

  4. paul commented on Sep 7

    Here I am sitting in an airport – and listening to: “Despite what Jobs said it must not be selling very well”

    some opinion – here’s my opinion –
    Apple computer and Amazon are the best smoothest running companies in the world today! I would say that about RIMM but they are a one trick pony – and GOOG yes – I’ll put them on the the list too – All of these companies are sprinting at just under the speed of sound….it’s a big WOW!

  5. barlow commented on Sep 7

    Reminds me of a parable Jesus tells –


    The Parable of the Workers in the Vineyard

    “For the kingdom of heaven is like a landowner who went out early in the morning to hire men to work in his vineyard. He agreed to pay them a denarius for the day and sent them into his vineyard.

    “About the third hour he went out and saw others standing in the marketplace doing nothing. He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ So they went.

    “He went out again about the sixth hour and the ninth hour and did the same thing. About the eleventh hour he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’

    ” ‘Because no one has hired us,’ they answered. “He said to them, ‘You also go and work in my vineyard.’

    “When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’

    “The workers who were hired about the eleventh hour came and each received a denarius. So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. When they received it, they began to grumble against the landowner. ‘These men who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’

    “But he answered one of them, ‘Friend, I am not being unfair to you. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the man who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’

    “So the last will be first, and the first will be last.”

  6. ron commented on Sep 7

    First mistake for Jobs in quite awhile. Not sure what events have created this price reduction but margin rather then volume has been the Apple business model. Part of the issue maybe as Slavitch says that the Iphone had become a status symbol rather then a new alternative fully functional new age phone that would have immediate wide acceptance in the tech world. Just a guess that Jobs intention was a mass produced high end product that did in fact provide significant advantages over current technology and would be adapted for that reason rather then a piece of jewery.

  7. mh497 commented on Sep 7

    Observation: I’ve never bought the 1.0 product of anything, yet I bought an iPhone, and though the network needs work, I’m pretty darn amazed with the thing. I could care less about the status, the features are awesome and sweet to use.

  8. John commented on Sep 7

    I saw the silly narcissistic behavior first hand. A couple days after it was released I ate lunch with a bunch of people from work. One guy from another office was visiting a colleague, and he had an iPhone. He sat next to me during lunch.

    During the meal he waved the phone across my plate several times, to check messages, to use the calculator, etc. I was eating and didn’t say anything. As the meal ended he had a near-tantrum…his new toy hadn’t drawn any comments!

    (The TV commercials were enough for me to get a feel for it, plus I’ve had PDAs for years…the iPhone is just a garden variety PDA with a sleek interface…)

  9. Winston Munn commented on Sep 7

    Now the real Quote of the Day:

    “Separately, Fed Governor Randall Kroszner told a conference: ‘We continue to follow these developments in financial markets closely, particularly those that may have a broad impact on real economic activity.'”

    Gotta love that…”impact on real economic activity”….as opposed to….false economic activity…bubble economic activity….Pigmen economic activity….fantasy economic activity????

  10. pkts commented on Sep 8

    Ahhh, some wonderful generalizations. I bought an iPhone on the first day because they were available. I wanted to replace my 2nd Gen iPod (my only iPod so far…gee I must be really far behind on this whole status symbol thing) and my treo (which crashed all the time). Additionally, I liked the idea of buying an Apple phone since the macs I have work so well.

    Perhaps a qualifier should be inserted the next time you want to use the term “every buyer” (yes I’m aware those weren’t Barry’s words but he basically endorsed them)

    As for buying a first generation iPhone…I haven’t had a single problem. I also bought a Macbook on the day it came out. Not a single technical problem with it…though the plastic around the keyboard gets permanently dirty. Of course, I did go everywhere using the Macbook showing it off in supermarkets, bookstores, movie theatres. The dang thing was heavy….its so much easier to be cool and show off my iPhone!

    I don’t care about the price drop….didn’t bitch…its cool they are refunding 100 but if you spend 600 bucks on tech and then complain about 100 bucks…I think you extended yourself a little too far in the first place.

  11. Dervin commented on Sep 8

    This seems really odd, Apple’s main fault with the Iphone wasn’t the price, but it was limited to one network carrier. There’s no shortage of people who’ll drop 600 bucks on a device which would take the role of their PDA/Phone/MP3 player. It’s annoying to manage all three.

    But you throw in the whole issue of canceling your current mobile provider and starting up with a new provider you get into a whole host of other charges everybody seems to ignore. One blogger estimated that it would cost him over $1,000 to switch to the iPhone.

    And you have the problem Apple tying themselves to one carrier who they have no quality control over.

    Apple would have been better of selling an unlocked version of their phone for the same price or even more. Apple Fanboys aren’t loyal to just one company but they are loyal to every company they use. Asking a fanboy to switch his mobile provider to AT&T you might as well asked him to switch to windows as well.

  12. Jessica commented on Sep 8

    Sideways question, but when did “narcissistic supply” enter the general vocabulary? Nice to see. Useful term for useful concept.

  13. Howard Veit commented on Sep 8

    The only thing that really means anything when the consumer purchases a product is expectation. Apple, Steve Jobs, and MAC have generated both expectation and integrity. I think anyone in business knows that you cannot put a price on integrity (honesty), but if you ain’t got it, you are out of business. The perception is that Apple intended to drop the price from the get go, to basically screw their own customers out of $100 per unit sold. Without Jobs intervening, Apple, it’s stock, and everything they have done over the past decade or so would have been wiped out. As it is, everyone will now be cautious before buying anything from Apple until it is “proven.”

  14. Jim Bergsten commented on Sep 8

    First — Apple didn’t LOWER its iPhone prices, it RAISED them initially to cover the “one-time” cost of the hype.

    Second — as usual I’m too lazy to research this, but I suspect Apple got blindsided by the rapidly decreasing cost and increasing sizes of flash memory — in other words, “manufacturing lead times” caused them to mass produce a bunch of 4GB iPhones that had no market value (compared to 8GB models) right from the start. Apparently, they couldn’t be cost-effectively refitted, so it’s either a deep discount or the crusher and a big posted loss.

    Third — the outside is elegant, but the inside is incomplete and almost obsolete. Flash sizes continue to grow and become cheaper, the cell and network interface is “old,” and key hardware is either missing or didn’t make it through test (for example, I thought there was a law saying that new cell phones had to have GPS capability). In other words, Apple probably has a bunch of inventory they have to blow off ASAP, hopefully in the Christmas season before it’s killed by what comes out next.

    Fourth — as Steve’s ghostwriters so eloquently state it in his letter to iPhone customers, price decreases and obsolescence are a fact of life in a rapidly changing marketplace (remind you of anything, day-traders?). It’s just accellerated.

    Fifth — virtually nobody is getting the $100 bucks. Just wait and see. There will be $1000 of “hoops” to jump through to get the $100. And, $100 credit in the store is less than $50 wholesale, and getting the customer into the store is going to generate a bigger sale anyway. And, some “insurance” firm will foot the bill discounted to Apple (meaning the whole thing will not be material to the bottom line).

    Lastly — “fool and/or idiot” is easy to say in hindsight. Nobody says that if the “1.0” happens to be a piece of a successful IPO. Everyone who bought one of these things made a financial decision and felt they were getting value for their dollar.

    Look at it this way — it’s kind of a badge of honor in Silicon Valley to be stiffed by Steve Jobs. So you iPhone owners who stood on line all night should feel proud.

  15. Jim Bergsten commented on Sep 8

    Eighth — the whole flap is just more iPhone publicity — for each person allegedly “pissed” about the discount, there will be ten more who will think they are getting a sweet deal at the new price.

  16. Jason R commented on Sep 8

    We’ve got one in the family and there are no hard feelings. The $100 credit is, imho, brilliant. AAPL is still net ahead $100 per unit on those sold prior. The only way to access the $100 is to spend it. Which means another phone, or ipod, or computer. Or it expires and he still got goodwill.

  17. Called_Bluff commented on Sep 8

    What ever happened to hooking your customer on free shit first?
    Toss out a few thousand iPhone’s to loyal customer’s, and in three months….
    well, that idea is dead now

  18. Jon H commented on Sep 8

    “So you iPhone owners who stood on line all night should feel proud.”

    They certainly came out a lot better than the dorks who stood on line all night (or for days on end) to be disappointed by Phantom Menace.

  19. Jon H commented on Sep 8

    pkts wrote: ” Not a single technical problem with it…though the plastic around the keyboard gets permanently dirty.”

    Try one of those ‘magic eraser’ sponge thingies, but be careful it isn’t too wet.

  20. SiamTwin commented on Sep 9

    not nice to insult people’s taste in gadgetry, or anything else for that matter. i’m sure many of your readers don’t agree with your musical tastes.


    BR: I am not challenging their taste in tech or music —

    I am commenting about the intelligence of overpaying for a new “1.0” object — and then whining about it whjen the price drops.

  21. jpmist commented on Sep 10

    I’ve about reached my limit with the gleeful Schadenfreude non-iPhone owners have been high-fiving over this. Let me paint you this picture. . .

    On July 20 you traded in your RX-8 for a brand new Lexus that cost $38,000. Last friday you drove by the same dealer you bought the Lexus from and you discover that he’s now selling the same car you bought for $25,460.

    You’re good with that. You knew the car would depreciate anyway, right?

  22. Patrick commented on Sep 10

    There’s a pretty big difference between a $500 phone and a $300 phone.

    I bought mine in early August because my old phone broke only to find out the other day if I had waited a week I could have gotten the $200 discount.

    Meanwhile every other phone has a 30, not a 14, day return policy and an insurance plan.

    So from that perspective it is obvious that the issue is less the initial $500 outlay as the fact that they seem to have abused their customers by off-laying their inability to predict farther than 2 months in advance onto the wallets of their customers.

    Or instead of taking narcissistic pleasure in buying an iPhone 2 months ago you can just take narcissistic pleasure in the frustration of others now.

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