When Is It Okay to Lower Prices?

Apple released details yesterday about how all of those early iPhone adopters can get their hands on their $100 Apple Store credit. Ever since Steve Jobs announced that there would be a credit for early adopters, I have been trying to decide if this is a good idea or not. On one hand, Apple dropped the price by a third after only two months on the market. On the other hand, how many times have you bought a technology product, or any product for that matter, and had the price drop significantly not long after your purchase? This happens all of the time! I know Apple is trying to make everyone happy here, and that’s a good thing, but does this set a dangerous precedent?

I bought an iPod right after they were released in 2001. I was the only person I knew that had one. People on the Metra would do a double take when they’d see me searching for a new song, and some of them would even ask me about the iPod. I felt like the coolest guy in the world. Early in 2002, Apple introduced a 10GB model, and of course I had a little bit of envy because I was quickly filling the 5GB of my iPod. Not for a minute did I expect Apple to give me my money back. I paid the price to have the latest and greatest Apple device, and it was well worth it. So what if a new 10GB model could be had for the same price?

That brings me back to the iPhone price drop debacle. Would such a huge uproar have occurred if Apple had released a 16GB iPhone at the same time as the 8GB iPhone price drop? It’s hard to be sure, but I don’t thing it would have happened. People would have had some envy for sure, but I doubt that they would have demanded their money back. Apple’s early adopters and Apple itself may have just slowed the release of new products by making it the company’s responsibility to pay back customers when new products are released. You can be sure that Apple and other technology companies will think twice when they have new products or product updates to release.

Consumers have determined that two months is too soon to drop prices. What is acceptable? Is one quarter (three months) enough time? How about six months? I guess we’ll find out the next time Apple has something revolutionary to release.