The iLove returns: Most iPhone owners happy with $100 credit

Computerworld - Apple's turnabout offer yesterday of a $100 credit to customers who bought iPhones in its first two months has brought most, but not all, back into the company's fold of the faithful.

It was also a smart business decision, added an analyst, that won't cost Apple nearly as much as people might think.

Late Thursday, Apple Inc. CEO Steve Jobs announced the credit as his response to customer complaints about the $200 iPhone price cut made the day before. Although he staunchly defended the discount -- "now is the right time to do it. IPhone is a breakthrough product, and we have the chance to 'go for it' this holiday season," he said in his open letter. He also apologized and said Apple had stumbled. "Our early customers trusted us, and we must live up to that trust with our actions in moments like these."

Reaction on Internet message boards, including Apple's own, was swift and generally positive, sometimes extremely so. "Completely satisfied. Faith restored," wrote one user on the Apple support forum. "This is way more than a step in the right direction, this makes everything OK," added another.

Others, however, weren't satisfied. "I still feel it should be $150 but this is at least a better solution than giving some credit and others nothing," griped one.

And some remained mystified by the whole mess. "For someone presumed to be 'cutting edge,' Mr. Jobs appears to have suddenly misplaced his 'Marketing for Dummies' book," said a user identified as y-me. "In one fell swoop, he has cheapened his most impressive product, diffused its mystique, undermined thousands of loyal consumers, circumvented positive attention on new products with negative attention on an existing one, cast doubt on future product pricing ... and generally torpedoed a campaign under full sail."

It wasn't that bad, said Ezra Gottheil, an analyst at Technology Business Research Inc. In fact, he suspects that the credit wasn't pulled out of Jobs' hat. "This had to have been kept in their back pocket, ready to use if necessary," said Gottheil. "If people hadn't complained, they would just not have used it."

Apple's reputation also played a part in the decision. "They know that pretty happy customers are pretty important to them," Gottheil said. "It has to pay the cost of taking good care of its customers."

That cost is different for Apple. When asked if any other technology company would have bent to users' complaints about a price cut, with Microsoft Corp. and Dell Inc. offered up as examples for comparison, Gottheil first laughed, then said: "I can't think of any [others] that have this kind of relationship with their customers. I could see a specialized automaker doing this kind of thing, a BMW, maybe."