With the release of the iPhone 3G in early July, apple announced a major price reduction for the iPhone. Steve Jobs made the announcement at one of apple's famous keynote addresses in San Francisco on June 9, 2008. By the look on Jobs' face, he was very excited about the price reduction. Lower prices meant that more consumers with smaller purchasing power would be able to buy an iPhone and therefore increase apple's revenue. It ended up that Jobs couldn't have been more right about the price reduction. Sales were at an all time high after the release of the iPhone 3G with its new lower price. Apparently, many of the consumers who had been waiting for a price reduction thought the move was a great idea too.
Not long after this great reduction people began to realize that there was a small problem with such a wonderful reduction. The iPhone was now cheaper than the iPod Touch, which is basically the same thing without a phone. Many economists and stockholders began to see that this price difference would make little since to the average consumer, even though there are clear reasons(The sixth bullet addresses a possible reason for the price of $299) behind the more expensive price of the iPod Touch. Sure enough, sales of the iPod Touch began to fall relative to their sales and growth over the past several months before the release of the cheaper iPhone 3G.
Although this was a problem, it was hardly as catastrophic as losing business to some other firm. Apple was only losing money to one of its other products which not to the product of another firm, if you get what I'm saying.
Thankfully, Apple held another conference in early September. At the conference, Steve Jobs talked about many new innovations primarily focusing in Apple's market for MP3 players. The company unveiled new reconfigured versions of both the iPod Nano and the iPod Touch. And to my distinct pleasure Jobs announced a price cut in the iPod Touch! The iPod Touch will now only burn a hole in your pocket that's about the size of $229 which is much better and way more realistic.
However, I still probably won't be buying one because I have no use for it. My old iPod Video is still clicking and until it dies I won't be getting a new one. Now all I need to do is hope and pray that both my laptop and iPod blow up in a freak accident and that our insurance gives us some money to get a new MacBook (which is supposedly coming out soon) and an iPod Touch.
1 comment:
I think the price reduction was an excellent move by Apple. Many economists were worried about the reduction in sales even for companies such as Apple who were previously doing well. However, with the reduction in price it seems that the Apple iPhone is doing better than ever. The drop in the Touch sales are trivial as long as Apple continues to grow overall as a company. My dad got the new iPhone 3G, and I would love to get one if my phone somehow happened to die. I have an Ipod video as well and have no reason to buy the Touch other than just to get the next cool thing. I think if I was lucky enough to acquire the new iPhone, I would definitely not look into getting the Touch as well.
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