Apple drops iPhone price to $399

Mathew Everett (Sledgehammer70) No summary

September 5, 2007 3:39 PM ET in News,

Apple has just announced a slew of news about their iPod refresh and the new iPod Touch. But in bigger news Apple has also just announced a huge & much needed price cut to the Apple iPhone.

Apple launched its new iPhone just a few short months ago with a 4GB model and a 8GB model selling for $499 & $599 respectively. But today’s news has just made the 4GB model obsolete and has dropped the price of the 8GB model to $399 making the new iPhone in line with current PDA phones on the market. Also showing us just how much profit Apple was making per iPhone sold.

This announcement might come back at Apple in a bad way as most users have 30 days on their iPhone purchase allowing all 4GB users and current 8GB users a chance to return their fancy iPhone at the regular cost and wait a few weeks to get the same phone for $200 cheaper. I hope Apple & AT&T are ready for this one.

Update [Sept 6, 3:45pm]: In an open letter, Steve Jobs has promised a $100 store credit for all early iPhone buyers.

27 Comments:

  1. primesuspect
    5 Sep '07, 7:41 pm

    That is a significant price drop

  2. Sledgehammer70
    5 Sep '07, 7:42 pm

    So many iPhone owners are going to be pissed! they just spent $200 more just over a month ago... I can see a huge reflux in returns so people can get a cheaper price.

    400,000 x $599 = $239,600,000.00 in possible returns maybe more...

  3. Lincoln
    5 Sep '07, 7:55 pm

    That is the way of Apple, though. If you buy your iMac 2 days before the design refresh, too bad for you.

    The iPhone just got a lot more attractive to me.

  4. Sledgehammer70
    5 Sep '07, 7:57 pm

    Yeah but AT&T has a 30 day return policy... so all those iPhone users can save their cash if they return and re-buy. I think the next step is making the phone packages better. If they offer a wider spectrum of plans they could really boost their market share. Especially if they open the doors to other vendors.

  5. Thrax
    5 Sep '07, 8:08 pm

    It's funny because the Blackberry Curve can do everything the iPhone can, and you can load any application you want. The only downside is that it has no touchscr-- wait, that's not a downside.

    h264? You got it.
    MPEG2? Yep.
    MP3? Yup.
    WAP or desktop-configured browsing? Yup.
    Ringtone support? In the box!
    Backgrounds? Supported by the software!
    Expandable memory? Yep!
    Java app support? Gmail, gmaps, IRC, AIM, etc? YEP!

    Sorry, iPhone, you just look pretty.

  6. primesuspect
    5 Sep '07, 8:26 pm

    4gb iPhones that remain in stock are $299. I don't expect those will last long.

  7. Sledgehammer70
    5 Sep '07, 8:41 pm

    Apple has updated their site... AT&T hasn't laggers!

    the new iPod Touch seems like a sweet item, as it has built in wifi and sells for $299.. still out of my rnage for a music player/ movie watcher but it is a cool tool.

  8. muddocktor
    5 Sep '07, 9:37 pm

    Yeah, I was just looking at their new stuff and see that they now have an iPod Classic (which corresponds to the old iPod video) and they actually have a pretty decent price for the cheap version for what you are getting. The cheap version, which sells at the previous 30 gb iPod video's $249 price point, now has an 80 gig hard drive in it. Thats going to really piss off anyone who bought the 80 gig iPod video recently for $100+ more.

  9. Sledgehammer70
    5 Sep '07, 9:52 pm

    I am wondering who in the heck needs to walk around with 160GB of video or even music? maybe a DJ or something?

  10. fatcat
    5 Sep '07, 11:23 pm

    SO PISSED....

  11. muddocktor
    6 Sep '07, 10:30 am
    Quoting fatcat

    SO PISSED....

    Charlie Demerjian at the Inquirer wrote a nice little opinion piece about you "early adopters" of the iPhone, fatcat. How does it feel being fleeced by Apple?

  12. Buddy J
    6 Sep '07, 3:17 pm

    Fleeced? Hardly. That'd be like saying that people who buy the NEXT BEST THING processors as soon as they come out get screwed because the price is just gonna drop in 3 months.

    I have zero regrets about buying my phone when it came out. It's been kick ass here in Seattle where WiFi grows on trees. Google Maps pwns all and saves my ass from getting lost.

  13. Sledgehammer70
    6 Sep '07, 3:28 pm

    CPU's usually don't drop in just 2 months from when they were first launched. Maybe the last 3 quarters have been pretty big for CPU's but it isn't a trend for CPU's to drop in price 60 days after release.

    But the iPhone 2 months after launch with a 33% drop in price is pretty large. I would be beyond pissed, even if the thing worked flawlessly. $200 is a chuck of cash.

  14. muddocktor
    6 Sep '07, 3:38 pm

    Yep, I definitely have to agree with you, Sledge. But then, I am not the target audience of the iPhone either.

  15. Lincoln
    6 Sep '07, 7:41 pm

    In an open letter, Steve Jobs has told early iPhone buyers they will be receiving a $100 credit to the Apple Store. It may not be the full $200 if you bought an 8GB, but it sure seems much easier to swallow. (article updated)

  16. Leonardo
    6 Sep '07, 7:53 pm
    So many iPhone owners are going to be pissed! they just spent $200 more just over a month ago...

    Why would they be upset. Any Apple product is worth what Steve Jobs says it is. Apple was doing the world a favor by not originally charging $900 a piece for iPhone.

    Fleeced? Hardly. That'd be like saying that people who buy the NEXT BEST THING processors as soon as they come out get screwed because the price is just gonna drop in 3 months.

    Face it, you were fleeced! Sledge's comment above is right on the money (pun intended). You don't see ANY new CPU entering the market new, only to see a 33% price cut only a few weeks later. Additionally, you don't have to sign two year contracts with any new CPU.

    Hey, if the iPhone was worth $$$ to you, that's great! I've no problem with that. The value of any item is what someone is willing to pay for it. Obviously, the masses decided that the original price was NOT worth it. There is no other reason for Apple to have abruptly lowered the price so dramatically. I think the whole situation is hilarious.

    Smart thinking by Jobs on the Apple Store $100 credit. Make the customers happy and drive more Apple business.

  17. Sledgehammer70
    6 Sep '07, 8:21 pm

    Sledge writes a nice long letter to Steve Jobs.

    Dear Steve,

    Just how bumpy are high quality 2 month old roads?

    Thanks

    Sledgehammer70

  18. Thrax
    6 Sep '07, 8:30 pm

    Blackberry Curve > iAnything.

  19. Leonardo
    6 Sep '07, 8:55 pm

    Prepaid for us - total about $7.50/month. Excellent coverage. (See Thrax, I'm not a cell phone Luddite. We have two cell phones at home, I just don't usually carry one.)

    AT&T recently purchased one of the cell carriers up here, so the iPhone will be coming to Alaska, too. If it drops to $49.99 at $7.50/month unlimited nights and weekends, I'll consider one. Oh, yeah, it would need to be month to month prepay. No stupid contract with 12 pages of fine print. (It's such a racket guys! Not just AT&T/Apple, but most of the cell phone services. The cell phone industry = 'The Man.' The Man keeps you down! )

  20. Sledgehammer70
    6 Sep '07, 9:11 pm

    Thrax I would have to say the Blackberry Curve is pretty but they need to make it a bit thinner...

  21. Thrax
    6 Sep '07, 9:37 pm

    This phone is barely half an inch thick and is easily the most versatile phone on the market. It's not that much larger than an iPhone.

  22. fatcat
    6 Sep '07, 9:49 pm
    Quoting fatcat

    SO PISSED....

    ok, im not so pissed today, now that steve is giving me $100 towards my new iMac along with the student discount, um that brings it to a nice $1299.

    and Thrax, at least when i get off over my iPhone, my keys don't get sticky like your blackberry

  23. GrayFox
    6 Sep '07, 9:52 pm
    Quoting Keebler

    That is the way of Apple, though. If you buy your iMac 2 days before the design refresh, too bad for you.

    The iPhone just got a lot more attractive to me.

    Apple does this every year at the same time.

    If you have a problem tough luck you should read the news.

  24. Sledgehammer70
    6 Sep '07, 9:55 pm
    Quoting Thrax

    This phone is barely half an inch thick and is easily the most versatile phone on the market. It's not that much larger than an iPhone.

    Blackberry has yet to make a device I like. I guess it has to do with the "its not that cool looking" factor...

  25. Thrax
    6 Sep '07, 10:04 pm
    Quoting fatcat

    ok, im not so pissed today, now that steve is giving me $100 towards my new iMac along with the student discount, um that brings it to a nice $1299.

    and Thrax, at least when i get off over my iPhone, my keys don't get sticky like your blackberry

    No, your screen just gets all ****ed up and gross.

  26. NiGHTS
    6 Sep '07, 11:56 pm
    Quoting Sledgehammer70

    Blackberry has yet to make a device I like. I guess it has to do with the "its expensive and shiny enough" factor...

    Fixed.

  27. Sledgehammer70
    7 Sep '07, 12:14 am

    The Curve retail price is $449.00 if you sign a 2 year contract it drops to $299.00

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