iPhone Price Drop Both Loved and Hated, Lots of iPod News, and More

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iPhone Price Drop Both Loved and Hated, Lots of iPod News, and More

The beat goes on: As you've probably heard, yesterday Apple unveiled new and refreshed iPod models, including a video-capable iPod nano, vastly increased storage in the iPod classic, new colors for the iPod shuffle, and the all-new iPod touch, which is kind of like an iPhone without the phone, as well as Mac-free downloading on iPhones and iPod touches via the iTunes Wi-Fi Music Store. But the biggest reactions today are to Steve Jobs's final tidbit: The 8GB iPhone saw a $200 price drop, now selling for $399, and the 4GB model was discontinued. (You can snatch up Apple's remaining stock of 4GB iPhones for $299.)

 

 

Reactions to that price drop have been loud, but also mixed. Some are understandably cranky at having to pay a $200 "early adopter fee," although others aren't as upset -- one blogger points out that if you bought your phone on Day 1, that works out to just $2.94 per day. (Not bad? Your call.) The stock price dropped 5 percent after the news (although it's still up 70 percent on the year), but analysts point out that quick price drops are common in the mobile phone industry. Blackfriars Marketing calls it "a shrewd marketing move," and even at the higher price, the iPhone outsold the BlackBerry, the Palm Treo, and other smartphones in July.

 

Guesses as to the reasons behind the drop are many. Business 2.0 collects 10 possible reasons, beyond Steve's expressed wish to "put iPhones in a lot of stockings this holiday season." If you bought an iPhone in the past 14 days, you should be able to get a refund of the price difference, and there have been unconfirmed reports of customers talking AT&T into awarding credits on their phone bills.

 

And here's USA Today's punchy Q&A with Steve Jobs. On the price cut: "That's what happens in technology." On whether the iPod touch will cannibalize the iPhone: "If anybody is going to cannibalize us, I want it to be us. I don't want it to be a competitor." And on the Beatles: "It will happen -- I hope by the first half of next year."

 

 

But enough about the iPhone -- what about the new iPods? The conventional wisdom is that the new lineup will cement Apple's dominance in the MP3 player market. Says Jupiter Research analyst Michael Gartenberg: "It's hard to see how anyone is going to take much ground away from [Apple] this holiday." (For example, Microsoft cut the price of the Zune by $50 this week, to just $199. "Nobody noticed," said Gartenberg.)

 

The iPod touch should attract as much attention from hackers as the iPhone has. Ars Technica discusses its capabilities, and Gizmodo quotes a source at Apple as saying the two devices "use the same damn binaries," so hopefully someone will figure out how to port the missing iPhone apps (minus the phone and voicemail, natch) to the iPod touch. Gizmodo also has a photo from Apple's official German website showing a Bluetooth icon on the iPod touch's display, for what that's worth. Apple Insider has photos from the event, CNET has a good hands-on, and you can find a stream of Steve Jobs's speech here. (And here's a theory: Apple could probably sell more Apple TVs if the devices could stream Steve's talks live. Good call.)

 

 

More quick hits on the new Apple stuff: What are we gonna call the newly designed nano? Analyst Shawn Wu likes "fatboy." Are the iTunes Store ringtones, the Starbucks deal, and the iPod touch bad news for AT&T? Will the iPod touch, er, touch off a lawsuit from High Tech Computer Corp, makers of the HTC Touch, an iPhone competitor? iTunes 7.4 is out, adding ringtone support, but it also deletes ringtones you already put on your iPhone. iLounge has a good tour of the iTunes updates.

 

 

Oh yeah, and there's some others news besides all this. Very quickly:

Apple is finally cool with the Dutch antitrust regulator. Stateside, the company has moved the iPhone-battery lawsuit to federal court.

Why can't Johnny have municipal Wi-Fi?

Apple is quietly pulling the iPod Hi-Fi from online stores.

Microsoft's Office for Mac team offers a sneak peek at Office 2008.

Google rumored to be working on a totally new "gPhone" mobile platform.

Apple Matters disagrees with Rick Rubin's claim that "The future of the industry is a subscription model...the iPod will be obsolete." (Yeah, tell that to Microsoft.)

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Anonymous

Cell phones are a crazy thing. It seems everytime I get a new cell phone, a month or two later it's either the free phone that new customers get or it drops by half the price. My girlfriend's phone was originally one that cost 200 bucks, but somehow she got it for free for signing a new contract. I don't understand how it all works. Maybe the iPhone will be even cheaper in a year or so with a AT&T contract. who knows.

At least Apple is give back 100 bucks, sort of. it's to buy more stuff at Apple, but better than nothing.

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Anonymous

Why didn't they include Mail on the iTouch. It has Wi-Fi. Major Miss.

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Rob

Here's the quote from Rick Rubin:

"The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home"

A walkman-like device?

Really Rick? ...really?

...I'll admit, the man is a visionary. Apparently, that includes hindsight as well. (I wonder if he knows what an iPod even is)

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derekm

Newsflash for all the whiners! Apple is now giving $100 store credit for early adopters of the iPhone. Paying $100 extra for 2+ months of early ownership is pretty fair.

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Anonymous

I'm in the iPhone 600 club. Sure, 100$ credit is great.

However, I'm also an apple investor.

Steve Jobs just managed to alienate half of the most loyal Apple consumers. What happens the next time Apple rolls out a new product and wants to create the same hype?

This isn't a technology-driven price-cut. This is monopolistic price-discrimination. Apple extracted wealth from their return customers.

This is exactly why Apple got served by Microsoft decades ago.

It's a great business move, if the world is going to end in 12 minutes.

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Anonymous

Waah. Can I get 500 bucks back Apple because you reduced the price of my MacPro two months after I bought one?

Waah. Can I get 20 bucks back Apple because I bought an iMac with 10.4 two months before Leopard's release?

Waah. Waah. Waah. I want a credit because prices alway come down after I buy something. Waah. Waah. It's just not fair. Waah. Waah.

Why don't you call someone who gives a damn using yer iPhone? I'd rather not listen to yer bitchin'.

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