Apple Stirs Hornet's Nest With iPhone Price Cut

By Gregg Keizer

September 10, 2007 12:00 PM ET

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Computerworld - IT managers might find more end users carrying iPhones and asking that they be supported, now that Apple Inc. has unexpectedly slashed the price of the 8GB model of its two-month-old mobile device by 33%.

But while the price cut from $599 to $399 might spur more sales to users who didnt want to pay the original cost, it stunned many of the people who had waited in long lines to buy the iPhone when it was released in late June.

They responded by becoming the online equivalent of an angry mob armed with pitchforks and torches. After Apple CEO Steve Jobs dropped the price-cut bomb on Wednesday during an announcement of new iPod music players, iPhone users flooded the companys support forums with complaints and accusations of betrayal.

For example, peeved customers started discussion threads with titles such as Demand Reparations! and Time for an iWar Against Apple. One user wrote: I feel like I participated in a beta test of the iPhone ... and I paid to do it.

On Thursday, Jobs issued an open letter in which he defended the price cut and said that buying a product before a lower price goes into effect is life in the technology lane. But he also tried to make amends by promising that Apple would issue $100 purchase credits to people who bought iPhones before the price change.

One thing Apple didnt cut was its iPhone sales target. Jobs said the company remains on track to reach the 1 million mark by the end of this month.

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