How Apple Betrayed Its Customers
Posted by ScrewedByApple at 9/5/2007 12:37 PM and is filed under uncategorized 
(Photo courtesty of Engadget)
Apple is a money-grabbing, opportunistic, disloyal company.
Just over 2 months after releasing the 8GB iPhone for $599, today Apple announced a price cut of $200...a whopping 33% off.
We all know that price reduction for technology products is inevitable. But I don't think that's what's at play here. No company can manage a 33% cost reduction in any technology product in under 90 days.
It is clear that the market price for the iPhone was never intended to be $599. The real price was always lower. Apple consciously decided to charge more than the fair market value for the product to maximize profit from early adopters.
(Photo from Apple's iPhone "Day One" photo gallery)
But who are the early adopters? It is safe to assume that many of them are loyal customers of Apple. Many of them evangelized to their friends about how great the iPhone is. Little did they know that they were being used as a revenue-generating marketing tool (quite possibly the first in history), paying $200 over fair market value and simultaneously doing Apple's bidding -- allowing their family and friends to touch and experience the iPhone, possibly convincing some to buy it, also at the inflated price.
So thanks Apple. Thanks for doing this to your customers. Thanks for the hype, the greed, and the betrayal.
Completely agree. From iPod to iPhone, iSuppli analyzed their Bill of Material (BOM), and every product brings huge profit to Apple - from their royal fans and customers. Greedy Apple!
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@PC User
iSupply only calculates the parts, not the labor or shipping and handling costs. Not to mention marketing, R&D, etc. There's a lot more cost than parts when releasing a product.
I bought a $500 4GB iPhone from Apple in early August. Not only is my iPhone obsolete already, I could've gotten twice the memory for $100 less. Well, my iPhone has been very helpful the last month, and I don't regret buying it for $500. Early adopters fee.
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I fully, and completely, understand the intricacies of cost breakdown (I'm in the tech field myself, and deal with consumer products). Even after you take a complete, out-the-door unit cost, you could not have squeezed $200 from it in 2 months. Therefore, you charged $200 more than fair market price for a short period of time. That is my argument.
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"Therefore, you charged $200 more than fair market price for a short period of time."
Fair market price is determined by what the market is willing to pay. Nearly a million consumers were willing to pay the original price for the iPhone. If the original price was not fair, no-one would have paid it.
Grow up, and quit your bitching.
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I would agree with you, however, people were calling this for months before the release. Apple was already working on v2.0 before 1.0 was released. Looking at the new iPod Touch you can tell specific features were left off just so they'll have something else to put out next year. They are slowly releasing these to market on purpose, but people will soon start waiting. I doubt they will ever give you money back...they don't do that for a lot of things.
I am personally waiting until v3.0 comes out. This will give them a chance to get all the bugs worked out and add all the features that I'll need.
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You complaining people suck!! Stop whining . You shouldn't have paid $599 if you didn't think it was worth it.
Man, it's ridiculous and sad. You are pathetic. Really pathetic.
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No, your pathetic. People feel ripped off for a very good reason. What business is it of yours to pass judgment on them?
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What is any business for people who bought something that works as advertised to complain about a price drop? Something is worth only what someone is willing to pay for it. A lot of people thought that the iPhone was worth $599 and they bought it, under no compulsion from Apple. A lot of people thought $599 was too much so they waited and deferred their purchase for the next gen. If you're upset that you paid so much, you have no one but yourself to be upset at. If Apple wants to lower the price it's their business. The iPhone is not a necessity, it is a luxury item.
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I am upset that apple purposely screwed The people who truely supported them through the 90s and helped bring apple where it is today. We were the ones who insisted that wasnt going out of business and promoted it to any PC users spotted. Now apple has lost our trust and support. will all you PC using ipod owning sheep support apple in rough times? doubt it.
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No more Apple products for me. One dollar ringtones, no major firmware updates and a $200 price cut within 2 months of release... Fuck Apple.
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You exercised your rights, you bought the IPhone. You have an IPhone. You used your IPhone. At the time Apple told you that the price of the IPhone was 599 and you obviously put a value on that phone of 599 or you wouldn't have bought it. Explain to me again what they owe you. This is a free market economy, goods are sold based on what people are willing to pay. One million people value the IPhone at $599, while the next three million people only value it at $399. Welcome to the free market. You wouldn't like the alternative.
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Bill, I appreciate what you are saying. However, the issue has several dimensions.
First, the price is not dropping because of a new version of the product. The price is just dropping. Fine, this happens all the time - but 33% in 60 days? Think about the magnitude of the drop and its timeline.
Second, this is a loyalty issue. Apple willfully ripped off its loyal customers. They knew it would be a hot commodity, and took advantage of that fact. There is nothing legally wrong here - it's just bad customer relations. If the price had dropped after a longer period of time (say, 6 months or a year) and by a smaller amount, I would agree that I paid the normal "early adopter" premium. But this is not the case here: the price was in fact designed specifically to make money off me and others like me for a short period of time. Illegal? Probably not. Disloyal and greedy? You bet.
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Honestly, you really have zero right to complain. Anyone that did not expect a price drop prior to the holiday season was only kidding themselves. There are many people that wanted one, yet felt the price was out of reach. Apple just doubled if not tripled their holiday sales with this move.
It is funny to see all of the bitter early adopters making assumptions (unfounded ones at that) regarding Apples business practices and intent. Yes you paid an early adopter premium, yes you paid a larger portion of R&D costs which apples has recouped to allow them to lower the price, yes you paid a larger portion of the marketing which allowed Apple to sell as many units as they did and able them to lower the price.
Honestly, your sense of entitlement should be shameful.
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The fact of the matter is that people who bought the iPhone pre-price-drop feel screwed (I'm one of them). Whether or not we have the right to feel screwed doesn't really matter. We do. We are early adopters who, after this experience with Apple, probably won't be in the future. I know of three people who had decided not to buy an iPhone went out a got one after playing with mine. (Sure, three people may not be a big deal, but multiply that by thousands like me. Read "The Tipping Point" to see how important that actually is.) If I'm not made to feel happy and I no longer early adopt, that directly translates to a loss in sales (not just from me) for Apple down the road. This isn't a threat, it's just the reality of the situation. If Apple doesn't feel it's in their best interest to keep their early adopters happy, that's their business, but my guess is that it will hurt them in the long run. If I'm not buying or recommending Apple products to friends and family, does it really matter whether or not I'm justified in being pissed off?
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The only people who expected a price drop are the non-mac users. you are the people who are used to being screwed because youve only dealt with main-steam amercian corportations for your computing needs. If you have been a mac user for even 5 years you would know that the prices for mac lines do not drop... the imac has been the same price for over 10 years! go back to microsoft and take the greedy corporate goons with you!
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AMEN!
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The facts are:
1. Many of Apple's most loyal customers who support them through product launches were early purchasers of iPhone.
2. Apple's price reduction will benefit the company with greater sales, but their marketing/sales department really dropped the ball on the original price.
3. The 800,000 early adopters are now a victim of an uncommon (although legal), reverse-price-gouge in that new adopters can get the same technlogy only 63 days later for $200 less.
4. I doubt anyone can show a similar example of such an occurrence in the history of product launches.
5. Apple can try to rectify the situation with its loyal customers, or it can screw them. In the long run, it all balances out. This will, and should come back to haunt them, and maybe not in very obvious ways.
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It's great that you set up this website! I was one of the people in line on launch day and I certainly feel screwed. There is no problem with the price being reduced, but such a significant price drop in such a short time reeks of fleecing of the early adopters. It's just unbelievably bad behavior towards your most loyal customer base. I'd say let's kick up a stink and see if we can get Apple to do something!
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If you got burned by buying your iPhone more than 14 days ago. Call Apple and ask for customer service manager and file a complaint! Here's the #:
1800-MY-APPLE option 8 and then 9.
The more iphone owners call, the more pressure they'll get. Personally, this is one loyal MAC fan that isn't loyal anymore... The fun ride is over Mr. Job your free lunch is going to hit you in the face!
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and you can email steve jobs at sjobs@apple.com and steve@apple.com
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Well, looking on the bright side:
1. I have the collector's edition of the iPhone (4G).
2. I have apple care till 4 Jul 09.
On the dark side:
1. This little stunt cost Apple $328 dollars today. (Rather than buy a new iPod, I will just get the HD upgraded in mine.)
2. Rather than purchase iWork, I'll just download the new version of Neooffice.
3. Rather than replace both my laptop & my desktop this quarter, I will replace my next top next year.
3. I don't see myself rushing out to replace Tiger.
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Agree on purchasing Leopard. Tiger works just fine. Won't be replacing it anytime soon.
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And I am not going to renew the waist of money .mac account... I will make $400 off apple in 5 years doing that! plus ill use the $100 iphone rebate to by a non-apple pair of earphones with mic.
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Waaa waaa waaaa
Here is my little iViolin playing you a little iTune.
Grow up.
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Hahahahahahaha ... iViolin ... good one!
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Oh, fuck you all. You live in a capitalist country. Get the fuck over it or GTFO.
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Thank you for your well thought out, articulate and constructive comment. You truly elevated the discussion and helped us all understand the situation much better.
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Look Apple needs to know their custers feel insulted. And everyone has a right to voice their thoughts. Its great the price went down. Now does Apple want to smooth over 800,000 customers with a rebate or just keep the cash? Its their choice both have pros and cons. Its better PR to keep your base happy.
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I completely agree with your outrage. I find this price drop to be unprecedented. I sent this email to the iphone feedback page and sjobs@apple.com:
Here is a story of betrayal. The iPhone is wonderful. I use it every day and would never want to give it up. Unfortuantely something happened yesterday that changed my opinion of Apple.
I have been an advocate and religious user of Apple products for several years and am often an early adopter. I recommend your products to everyone I meet. Unfortunately, I can no longer do this. I feel like a fool and I feel betrayed.
I am angry, disappointed and feel cheated after hearing news of a $200 price drop on the 8GB iPhone. I purchased the iPhone on the day it was released and here we are around 2 months later with an unprecedented 33% price drop. That's too much too soon to not be suspect.
Today I already told a few people how disappointed I am with Apple after they commented on my phone. This will end up hurting Apple in the end.
Please consider crediting back the early adopters who bought your awesome product at both AT&T and Apple stores! Unfortunately, I no longer feel I can support Apple with my money or good will.
Betrayed,
Scott S
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Thank you Scott, You explain my feelings perfectly. I think that the only people deeply hurt by this are the ones who worked hardest over the years to get mac where it is today. I converted the 20 person office I worked at to macs in 1992 when all other companies were running away from macs and the thanks I get for the 20 years of active Mac promotion is to be screwed by some tapdancing marketing scam. It is so 21st Century American Corporation. My Apple promotion days are gone and replaced with disgust.
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I am glad the iphone price came down. I just dont like it that it seems that apple has joined the ranks of the mainstream corporate america in its methods of maximizing profit at any cost. Even Mac enthusiast, Chuck Joiner from Macnotables is justifying apples actions by saying all tech companies do it, look, Motorola does it.... WELL MAC DOESNT DO IT (until now) and thats what made them special. I am upset because Apple is gone, it has been replaced with a greed machine that planned to screw loyal Apple supporters to maximize profit. Even the "apology" is laced with another money makeing scheme. Please, how is dropping the price on a 2 month old product part of technology as Jobs puts it?....its all Bushtalk covering the well calculated plan. I want apple to succeed, I just think there could have been a better way to do it than to rape their trusting fans.
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