Reaction faction: Apple sours the love of some iPhone owners

Customers angry over $200 price cut vent online; Jobs says 'that's what happens'

Senior Reporter, Computerworld |

When Apple Inc.'s CEO Steve Jobs said Wednesday that iPhone owners love their smart phones, he had no idea his next words would turn many of them into the Web's version of a mob of angry farmers armed with pitchforks and torches.

"The customer satisfaction numbers for the iPhone are off the charts," Jobs said near the end of an 85-minute event that most had bet would be only about iPods. "The customer sat[isfaction] numbers are higher for the iPhone than for any Apple product ever. They love it.

"But we want to make the iPhone even more affordable for even more people this holiday season," Jobs continued. "So we're going to do something about that today. We're not going to sell it for $599 anymore."

Instead, as a giant screen behind him vaporized first the 4GB version of the device, then the price of the 8GB model, he dropped the bomb. "We are going to price the 8GB iPhone at just $399."

From the tone of most messages that quickly flooded Apple's own forums, the love Jobs talked about might have been a pipe dream.

"Having paid full price for my iPhone not more than 2 moths [sic] ago, I am shocked that a price drop was announced so quickly," said a user identified as Ryan Shannon in what he said was a letter he'd just mailed to Apple. "Not only was the drop in price surprising, but the amount in which it dropped was staggering to say the least. I demand an explanation."

Although many of those angry over the price cut claimed to have been longtime and loyal Apple consumers -- some even listed their Apple-branded inventory -- others said they'd only recently been converted.

"I moved to Apple from PC. I may be moving back to PC now," said a user tagged as ShannonRawls, also on Apple's forum. "I bought two 4gb iPhones and this is how I get done? I feel like someone just slapped the ish [sic] outta me."

The complaints centered around several factors, chief among them the short span between the iPhone's debut and today. "I knew a price drop was going to come eventually, but in less than 2 months?" wrote kimirike on an everythingiPhone.com forum. Other causes of their pain included the size of the price cut -- one owner said he figured the reduction was a one-month depreciation of 33% -- and the abandonment of the 4GB version.

Some seemed most dismayed that they -- self-described Apple boosters who had faithfully not only bought its products but convinced others to do the same -- had been treated like the hoi polloi. "Over time I have owned a 3G iPod, original shuffle, iBook G4, iMac, new shuffle, 4G iPod, video iPod, iPod mini and now the iPhone," Dawgfan said. "I can see updates to the product line being made over time but $200 in two months is a kick in the nads to EVERYONE who bought an iPhone."

Although the forums were scattered with accounts from people who claimed that they had talked either Apple or AT&T -- the iPhone is also sold at AT&T retail stores -- into partial refunds or credits, Apple's and AT&T's official return policies are identical: customers who purchased an iPhone within the past 14 days can return it for a full refund, though a 10% restocking fee will be charged if the box has been opened.

Not everyone writing on the forums was upset at the price slice. In some threads, in fact, the dialogue, such as it was, degenerated into name-calling, with loyalists branding those complaining as "whiners" and those demanding recompense calling their opponents stooges, or worse.

In a now-locked Apple forum thread titled "iPhone price drop complainers = unloyal customers," someone identified as Noah Kivett said, "You are not the loyal customers that they are slapping in the face. You are their disloyal customers."

Kivett got kicked around quickly. "Are you suggesting we should blindly accept anything a huge, multi-billion dollar company decides to do? In that case 'loyal' is the same as 'stupid,'" said David S.

Although Apple public relations did not respond to questions, Jobs himself told early adopters that such was the breaks. In an interview with USA Today that was posted to its Web site Wednesday night, Jobs was asked what he would say to customers who recently paid $599 for an iPhone. "If they bought it a month ago, well, that's what happens in technology," he answered.

Talk like that isn't likely to win back the love.

A few users simply expressed bewilderment at a decision that seemed to alienate so many, from a company that has a reputation for treating consumers right. "As a VP in marketing the [price cut] is just a bad strategy for future releases," said Jean-Laurent-Vilon. "I would have understood a release of a new iPhone model at the same price but a price drop sends [a] bad signal to their customer base. I find this move from Apple very weird."

Others, however, were able to maintain a c'est la guerre attitude. One summarized the situation as briefly as those lines in front of Apple stores back in June ran long: 420greg on everythingiPhone. "Remember how cool it was to be the first person at work/school to whip out your iPhone? The cost of that coolness was $200."

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Senior Reporter Gregg Keizer covers Windows, Office, Apple/enterprise, web browsers and web apps for Computerworld.

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