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iPhone Price Drop

I find the reaction to the $200 drop in the price of the Apple iPhone fascinating. Lots has been written on the subject, so I won’t rehash the details.

I think there are two key issues that made this such a big deal:

  1. The press is itching to find bad iPhone news to report, especially when they were criticized for giving Apple so much free press leading up to the iPhone’s release. It all sounds like a tempest in a teapot.

  2. The simple price drop is very much unlike Apple’s MO. Apple normally discounts its products by removing lower end products, and adding higher end/speed bumped products. The originally high end product simply becomes the low end product with a lower price.

    In this case, Apple simply dropped the low-end iPhone and dropped the price. Apple did this, rather than introducing a 16GB iPhone at the same price as the 8GB iPhone, in an attempt to change the public’s perception of the iPhone as an expensive product.

So I guess the old saw in product pricing that “you can always lower your price, but you can never raise it” isn’t always true.