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Apple Cuts Price of Most Expensive iPhone

Offers $100 credit to early adopters

By Mark Huffman
ConsumerAffairs.com

September 6, 2007 

That's good news for would-be iPhone buyers but it infuriated those who had paid full price for the devices. In an unusual bit of backtracking, Apple CEO Steve Jobs offered a backhanded apology and said the company would offer a $100 credit to most of those who paid full price.

Jobs' letter, posted on Apple's Web site, said that anyone who bought the Apple cellphone in an Apple or AT&T store and who is not eligible for a rebate, can receive a $100 Apple store credit. Details remained sketchy.

While striking a somewhat apologetic tone, Jobs made it clear early adopters shouldn't be surprised if they don't get the best price.

"This is life in the technology lane," he wrote. "If you always wait for the next price cut or to buy the new improved model, you'll never buy any technology product because there is always something better and less expensive on the horizon."

It's a somewhat more combative tone than Jobs had adopted the day before, when he announced the price cut.

“The surveys are in and iPhone customer satisfaction scores are higher than we’ve ever seen for any Apple product,” he said Tuesday. “We’ve clearly got a breakthrough product and we want to make it affordable for even more customers as we enter this holiday season.”

The 8GB iPhone is available immediately for $399 in the US through Apple’s retail and online stores and AT&T retail stores. Apple said the iPhone 4GB model will be sold while supplies last, apparently indicating the lower priced model will be phased out.

The price cut was predicted back in January 2007, almost six months before the iPhone was introduced.

iSuppli, a market research firm, predicted Apple would quickly cut iPhone's price because at the introductory price of $599, each unit carried a huge profit margin.

New iPod

Apple this week also introduced the new iPod “classic,” featuring 80GB or 160GB of storage. The new device is priced from $249 up, a significant reduction from earlier models.

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