“Customers aren’t going to have an issue with this price move.”
Clearly Apple didn’t overlook this fact, it has become a holiday promotional activity. This is like a captain obvious situation for a promotional event! So Apple has effectively created a $100 coupon for a holiday purchase (additional iTunes, a new laptop….).
Apple has essentially created a compelling market event to purchase more Apple stuff. More people on the iPhone may help establish apple as a new mobile computing leader and people that may have been just been introduced to the Apple brand, will need to spend more in-store. A n typically spend beyond the credit, I’ve always spent more money than I have ever had on a gift card. Store credit/Gift cards are just a catalyst for incremental spend.
This also increases the consumers investment into the Apple platform guaranteeing an increased share of wallet within the iPhone community across the product porfolio.
It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone ‘tent’. We strongly believe the $399 price will help us do just that this holiday season….
Therefore, we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T, and who is not receiving a rebate or any other consideration, a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store.
More people with iPhones will extend the apple platform and drive an i-centric application developer community. Apple has the opportunity to be the “on-the-go OS” for the next generation of computing. This market seeding event will help justify AT&T’s upgrade which is sorely needed for high speed wireless.
to balance the thought a little – another view below from bold investors friday round up:
I give AAPL a thumbs up and advice people to buy Apple shares AAPL while its still down since Wall st. simply gets it wrong, as American Technology Research analyst Shaw Wu thinks the price cut on 8GB iPhones to $399 from $599 to be both positive and necessary.
“We have had reservations with its high price point and are glad to see Apple address this problem,” he explained. “In addition, we believe this lower price is necessary to reduce cannibalization with the new iPod touch, which is essentially a thinner iPhone without the cell phone, e-mail, and Bluetooth.”