An Open Response to Steve Jobs' Open Letter

There is a bit of truth to that.

In fact, anything is way better than most companies would offer.

What did Motorola offer its customers when the RAZR dropped from $500 to about $200 in just a few months?

Giving it as a credit is not that bad an option. Most folks who have anything electronic always need some additional accessories. They do sell stuff from other companies. Cash is always better, but a store credit is not so bad at the Apple store.

What I find funny is that ALL businesses do this.

Oh really? In my experience, very few businesses do this. Some may get a bit more willing if you threaten to raise a serious complaint, but on the whole, it's rare that when a price goes down, the company starts offering money to owners who bought the product before the price drop.

You compare this to unhappiness with a flight or a shirt, but that's a totally skewed comparison — this is a simple price drop. It's not an issue with the product, it's just a price drop. World of difference, there.

Mike,
I agree with Faruk.

My experience with many companies is that if you complain to them, they'll give you a small concession. Many times it is the same concession that would use to incent a new customer, but they don't tell you that.

Oh really? In my experience, very few businesses do this. Some may get a bit more willing if you threaten to raise a serious complaint, but on the whole, it's rare that when a price goes down, the company starts offering money to owners who bought the product before the price drop.

You compare this to unhappiness with a flight or a shirt, but that's a totally skewed comparison — this is a simple price drop. It's not an issue with the product, it's just a price drop. World of difference, there.

This is a serious complaint. Also, many businesses will do this. The sports shop I used to work at would give free merchandise to unhappy customers, the bar I spent a week working at would give free drinks if a customer was not happy with, and a big money example is PC World. They will offer users money off selected hardware and software through the manufacturer if customers raise a serious complaint (at least, that's what I was told to do when I received work experience there).

Apple want more of their items off the shelves, therefore the iPhone is the perfect way to do this. I wouldn't be surprised if this wasn't planned from the start. As I've shown before it's a typical act in business and Apple only come away smelling of roses after news circulates on the Internet about Steve Jobs being the second coming of Christ. He's a clever man, and I'm pretty sure this was his plan.

Those are all on an individual level, if a customer really takes the time to b---- about his purchase.

Apple did this across the board after a general wave of complaints.

all you did was buy a bunch of code, nothing even physical!

I can safely assume that you never buy software for more than the cost of a blank CD, then?

$100 isn't much at an Apple retail store.

It's more than a shuffle, and can get you a new nano for $50, not to mention the various iPod docks, headphones, cables, accessories, and software (notably, iLife '08) at that price point.

Yeah, I guess those things really are just drops in the bucket.

I'll take your $100 if you feel so slighted. :-)

I can safely assume that you never buy software for more than the cost of a blank CD, then?

Or, books for the cost of the paper. They are just bunches of words.

So, you're not taking your $100, then?

Just to be clear, he can't take his $100 because they are not offering him his $100. They are offering them "a store credit of $100".

I don't mean to be pedantic about it (and I'm not bitter about the issue because I don't even have an iPhone). I just find it very strange that, in this whole discussion about precisely this distinction, you chose this wording.

Now I do think it is actually nice of Apple to do this and I would agree it is not typical (although not unheard of either). But I do see a world of difference between giving somebody back $100 (which they may choose, for example, to save) and giving them a $100 credit. As such, I would have said "So, you won't be using your $100 credit?".

It's more than a shuffle, and can get you a new nano for $50, not to mention the various iPod docks, headphones, cables, accessories, and software (notably, iLife '08) at that price point.

Now there is a thought. There is a presumption that pretty much it is Mac users getting the credit. The fact is that a significant portion (if not the majority) of iPhone buyers are Windows users. They may have no interest in anything else from Apple. Kinda sucks to be them I guess. A pity you probably can't use the credit to apply to your iPhone bill.

There is a presumption that pretty much it is Mac users getting the credit.

Indeed, only Apple users ever use "various iPod docks, headphones, cables, accessories", or buy shuffles and nanos.

Yeah, I'm not sure who made that assumption, really.

Me at the very least. I tend to think people buying from the Apple store are Mac users. It is a bad and false assumption, but there you go. My thinking on the credit simply was well Mac users will be able to get some software or some such.

There is a presumption that pretty much it is Mac users getting the credit.
Indeed, only Apple users ever use "various iPod docks, headphones, cables, accessories", or buy shuffles and nanos.

My point is for some they have no need, want, or desire for any of those things for whatever reason. That it is pretty much junk to them and cause it is tied to the Apple store pretty much useless. The more I think about this the more I'm thinking the credit really isn't as grand a gesture as it seems and in fact is a bit arrogant (I'm actually trying to not think in those terms, believe or not, I keep reminding myself they didn't have to do anything). Cash (or something that spends like cash) would have been best but at the very least I think also making it possible to apply the credit to an AT&T bill would at least be better.

Cash (or something that spends like cash) would have been best but at the very least I think also making it possible to apply the credit to an AT&T bill would at least be better.

Has there ever been any company that offered cash in a similar situation?

Remember the late-2005 Sony Windows rootkit debacle? Some Sony audio CD's literally damaged a Windows OS to the point that you needed to reinstall it to remove the rootkit. Sony's offering to customers affected? A few credits for other Sony CD's. Now, that's a crappy settlement.

Truth is that people who bought iPhones might actually be interested in getting iPhone accessories. If not, there are plenty of things that Apple sells that have nothing to do with Apple hardware or software. You could buy digital media, cables, cameras, or whatever.

Cash (or something that spends like cash) would have been best but at the very least I think also making it possible to apply the credit to an AT&T bill would at least be better.

Has there ever been any company that offered cash in a similar situation?

Just because other haven't is a reason for Apple not to?

Truth is that people who bought iPhones might actually be interested in getting iPhone accessories.

True. However there are going to be those who have already bought the accessories, likes someone elses accessories, or just do not want anymore accessories.

If not, there are plenty of things that Apple sells that have nothing to do with Apple hardware or software. You could buy digital media, cables, cameras, or whatever.

If you had cash you could save it, invest it, buy gas, food, clothes, whatever. You wouldn't have to pay Apples prices for those things and make that $100 go further. At the very least if the credit could also be applied the AT&T bill it could benefit everyone (using the iPhone as intended anyway) without forcing them to Apple's stuff they may or may not want.

I applaud and credit Apple for doing something to try to make things right. That said I think what they are doing ultimately is meant to benefit them first instead of a true mea culpa. I also think that if they were some other companies they would be criticized for it. If they had taken more time to think of it they could have made a better and less self serving offer.

That said I think what they are doing ultimately is meant to benefit them first instead of a true mea culpa.

I think it still comes back to the point that they could've simply not issued any sort of store credit.

Simply handing out benjamins would be great, but saying "Oh, Apple made a gesture, but it's still selfish" seems a curious notion in a world where companies seldom make any gestures.

I applaud and credit Apple for doing something to try to make things right.

No, it's not to "make things right" in any objective sense of that idea, because there is no objective sense of that idea short of "give all iPhone users $200 + tax + projected 3-month 10% compound interest in cash". Anything less than that, and there will always be people clamoring that Apple did not display enough goodwill, and didn't go all the way.

The move is good PR, and I'm not so naive as to say that Apple should've simply doled out free money because they should feel altruistic towards customers. Apple is a business. Businesses are out to make money. Simple as that.

Me at the very least. I tend to think people buying from the Apple store are Mac users. It is a bad and false assumption, but there you go.

Very silly assumption, too.

Fact that's been known for a while now: 50% (or slightly more) of all people buying a Mac in an Apple Store are Windows users.

Fact that has never been given in numbers but explained by Jobs in public: there are far more Windows users using iPods than there are Mac users (what a surprise, huh? ;))

Combine those two facts and you can safely assume that AT LEAST half of every customer going in an Apple Store is at the time a Windows user.

I've no idea what the real percentage is, but I wouldn't be surprised if it's upwards of 70-75%.

It's this kind of mentality that, as an Apple fanboy, makes me ashamed to hold that title.

Whenever you buy a first-gen electronics product, regardless of what company you buy from, you must absolutely realize that prices can drop by any amount at any point at any time after your purchase.

I just bought my iPhone 3 weeks before the discount announcement and I feel like hanging a big sign around my neck saying "Apple's Sucker!"

And think about those people who bought an iMac a month before the new ones were announced. Their machines are, the way Apple products go, obsolete upon arrival.

Sure, Apple has a better track record than most in doing this, but to say "OMG, Apple's lowered themselves to the level of Motorola!" is patently silly. Show me when Motorola has ever given consumers store credit when the RAZR gradually dropped from $500 to $200 in the span of the a few months.

This would make all future purchasers say, "wow, I can't loose by becoming a first adopter."

Your standard is hardly the no-compromise solution. The no-compromise solution would be $200 cash back. Even if Apple offered what you offered, there will always be people clamoring that "$200 store credit or $100 cash" means that Apple is still all about locking in people to buy more from its own stores. Even if Apple did offfer $200 cash, there will be those early adopters saying "Why didn't Apple just give us the low price to begin with?" I absolutely guarantee it.

Apple's stock didn't drop because it "let down" early adopters. It dropped because a $200 loss in markup meant, at face value, $200 in lost profits per iPhone.