While I am loath to talk about the most over-hyped product of the year, I was amazed that the news of Apple dropping $200 from the iPhone price only a couple of months after release. I think my expectation was like others, that there would be extreme angst from all the people that had rushed to buy early. In a fantastic example of cognitive dissonance though, there seems to be as many early adopters ok with this as not.
Engadget has a poll running on people reactions active. At the time of posting, the ratio of early adopters that are ok vs annoyed is 48:52 (6504/6998). Browsing through the comment stream, the comments from actual owners of iPhones are generally benign, the negative comments are almost all from non-owners. I was a bit surprised that there wasn’t a bigger outcry.
It reinforced for me what a good marketing company Apple is. Most companies know that there are a variety of price points that people are willing to pay for a product. The final price is a compromise between profit per unit and number of units sold, as there can only be one price for a product. Companies would love to have people who are willing to pay more do so, but reality and legislation generally prevent this.
New products always cost more and reduce over time as volume increases. The main reason for this has more to do with cost than a direct attempt to gain higher profit from early adopters. Apple has tuned their marketing to such a degree that they can inspire huge levels of desire in some consumers (no surprise there). They can then price arbitrage over a very short period of time and essentially get away with it. The only problem for them is they can only use that tactic sparingly, but with the level of pre-release hype for the iPhone, it is no wonder they tried it.