Newsletter #406 Preview: Apple Converts Rocks Into Gold Once Again

September 9th, 2007

When Apple decided to drop the price tag of the iPhone by $200, a lot of people wondered what Steve Jobs was “smoking.” After all, if a product is truly successful, you’d expect them to milk the profits from their new gadget for as long as possible before chasing after maximum volume.

But Apple is anything but predictable. While it’s true that new wireless phones frequently drop in price over the run of a specific model, having it happen in a mere 10 weeks would seem surprising. Indeed, Wall Street pounced on this development as evidence of a possible fire sale, that the iPhone wasn’t selling near as many units as Apple predicted, so they had to reduce the price sooner than expected.

Apple’s stock price took a small bath as a result, but does that make any sense at all?

Steve Jobs, for example, proclaimed last week that Apple was still on track to move one million iPhones before the end of the quarter, on September 30. But they have, as of Monday, already reached that milestone, according to a company press release. Third party sales reports for July indicated the iPhone was an unexpectedly top seller in the smart phone category, and on a par with the other hot-seller among “feature” phones, the LG Chocolate, which is sold through Verizon Wireless.

Story continued in this week’s Tech Night Owl Newsletter.

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One Response to “Newsletter #406 Preview: Apple Converts Rocks Into Gold Once Again”

  1. Funny, at any other company a price drop is heralded as a good thing. Apple drops their price on a successful product to make it even more successful and the analysts go into a tizzy.

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