Rationalizing Apple

Rotten Apple 

There was a compelling editorial that ran today on the Digital Media Wire about some of Apple’s challenges this week:

http://www.dmwmedia.com/news/2007/09/07/waiter-the-iphone-tastes-a-little-fishy 

It certainly has been an interesting and unusual past week for Apple–significant video content provider challenges and then fall-out from some evolutionary steps in their product and pricing offerings.  The ed piece raises some good questions and issues.

First, I do believe Apple was fully prepared to offer the rebate to early iPhone customers. There is no way they would have made a potential $100M decision within 24 hours without foresight. The Apple words about “listening to customers who complained” is marketing spin…and, prudent. But, hopefully for Apple, there are no further steps taken from here. As the expression goes, if you find yourself in a hole, it’s typically best to stop digging.

The last week, by and large, has been a perplexing one for Apple and the market.  I don’t fully comprehend some of the thinking behind the NBC negotiations.  And, I am still struggling with why Apple did an exclusive deal with AT&T (although I admittedly don’t know the term length or other key exclusivity facets of the deal.)  I don’t grasp the advantages to the company of introducing the iPod Touch, a device so similar to the iPhone, and I struggle to fully understand why a 66% price discount was necessary at such an early stage.   

All that said, the Company should be just fine here–and, this statement is not coming from a long-time Apple snob. Most iPhone consumers in the past few months (including myself) understand the product and price risks associated with being an early adopter.  As an example, this USA Today article from today notes that the price of Motorola Razr’s have repeatedly dropped since it’s launch. Further, the new price offering is highly compelling for such a damn good phone. If the price point was an issue before for someone, it certainly shouldn’t be anymore–the current iPhone is well worth it.

Further, Apple still maintains the best digital media players, digital media store and smartphone in the market…by far. And, despite the looming Google phone (which makes zero sense to me), I think their competitive advantages are safe for the near term future at least.  The iPhone is already the best selling smartphone in the market and it puts previous such efforts from folks like Nokia and Microsoft to shame.  Also, the new iPods have wi-fi capabilities and the Starbucks deal is smart–both advancements are the beginning of very cool things that can make the iPod/iPhone even more ubiquitous in the future.  And, lest we forget, the iPhone should sell 1 million total phones by month end–I may be wrong on this but I’m not sure T-Mobile sold that many Sidekicks in the history of the product line.  Apple is clearly “suffering” in part here from the challenge of massive expectations.   

In the meantime, as it all plays out, I’m certainly looking forward to redeeming my iPhone rebate at a minimum.     

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1 Comment

Filed under Business, News, Tech

One response to “Rationalizing Apple

  1. Pingback: Rationalizing Apple - Part Deux « Chillin’ in Suite 200

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