There is much wailing and gnashing of teeth about the $200 price drop on the 8 Gig iPhone that was announced yesterday. I bought my iPhone on the first day, and frankly, I’m HAPPY about the price drop. Here are five reasons why I think the $200 price drop is a good thing.
1. The service costs more than the hardware. While not insignificant, the price of the hardware isn’t a deal breaker for a contract that will cost me $3960 over two years. The iPhone was a great phone at $599 and it’s even better at $399.
2 . I have a vested interest in a well supported platform. I want the iPhone to be so overwhelmingly successful that accessories and third party software are everywhere. To do that requires tens of millions of units sold and that’s not going to happen at the $599 price point. It’s not going to happen at the $399 price point either, but I expect that price will drop more by Christmas.
3. The price drop leaves room at the top for a new model with more features. Maybe a 16 Gig iPhone? 3G? Who knows, but it will happen. Then I can buy that one and pass my current iPhone to my wife.
4. Increased barriers to entry for competitors. It’s not cheap to bring a new phone to market. By lowering the price Apple makes it more difficult for clone makers to compete.
5. It’s fun to watch the whiny little bitches complain. That’s enough reason right there.
UPDATE: Thanks for the $100 store credit Steve! You didn’t have to do it, but it’s another great marketing move. The message is Apple takes care of it’s customers.