So here is what Steve said a few days ago, “we have the chance to ‘go for it’ this holiday season.” They really do, just look at the Xbox 360 VS. the PS3, at $600 the PS3 didn’t sell near the units the Xbox 360 did at $400 for the Premium system, so $200 really does make a significant difference in sales.
Saul Hansell even took it a step further and looked at it from the point of view of a figurative MBA fresh on the Apple iPhone sales team and made some other points. First though, lets go back to the fact that Mr. Jobs was the most honest we have seen from any company in a long time when he said in a few more words that they dropped the price to make more money, he didn’t sugar coat it or give some other BS excuse, he said almost flat out they did it to bring home the bacon.
In Saul’s examination of the MBA perspective he examines the fact that higher iPhone sales combined with the same hardware being used in the iPod Touch means Apple has a bigger check in Taiwan which makes components per part cheaper. He also states that the more iPhones that sell the larger the “ecosystem” surrounding the iPhone gets. That ecosystem would obviously include accessories, software, features, and new income from other deals including the deals with AT&T and Starbucks. Let alone the fact that now there is an iTunes Store built into the iPhone and iPod Touch which means more music, videos, and ringtones sales than ever before, especially with the now growing number of iPhone owners.
In the end it all adds up to being a smart move for Apple, and Steve has no qualms about coming right out and saying that they are looking out for numero uno. They did however realize it was kind of a crappy move for the early adopters so they offered up $100 gift cards, which means what? More sales for the Apple store.
Steve Jobs Speaks the Truth About the iPhone Price Drop [via The New York Times]
Do you think that the 3G version (due out soon in europe) will come out at a higher price than the current US (2.5G) version?
Personally, I think much may depend on whether the 3G is already in the phone (to be unlocked by a firmware update). In retrospect, it has been prudent to release the US version on the 2.5G network to gain the broadest sales impact.
There is no reason to think that 3G is already in the phone.
I think Apple will put a serious dent in iPhone sales if they don’t release a 3G phone in the US at about the same time they release it in Europe. The last thing they want, after cutting prices so dramatically, is to have Mossberg, Pogue, and everyone else advising people not to buy 2.5G iPhones as Christmas gifts because it is inevitable that they’ll be replaced by 3G phones by Valentines day.
It is quite possible though that they sell the 3G phone at a premium though, perhaps the 16GB phone will also be 3G and be priced at $499.
When this happen I added to some comments on email that the 3g would happen after the turn of the year and this was done to empty stock. I do not need 3g but you can see the handwriting on the wall..