The reason that Jobs announced a $100 rebate to people that bought the iPhone within 14 days is because AT&T allows people to return iPhones within 14 days for a refund minus a 10% restocking fee.

Lots of people must have started returning the phones and buying them for the discounted price (which is very expensive for Apple), so they figured that if they offer $100, and you’re only going to get $540 back for a return after the 10% restocking fee, you’re probably not going to bother returning the phone. It’s pure economics.

Here’s a quote from AT&T’s site:
“Apple branded equipment is covered by a 14-day return policy and must be returned to the original point of purchase. If the Apple branded equipment is returned unopened and in the original shrink wrapping, it will be refunded back to the original payment method. Opened Apple branded equipment that is returned within 14 days will be subject to a 10% open box restocking fee. All products must be packed in their original, unmarked packaging including any accessories and manuals that shipped with the product.”

Trust me, Jobs doesn’t care about the users, it’s all about the Benjamins. Once again he’s sucked everyone into the Apple spin zone.

I think Apple is making a mistake lowering the price that much, and misjudging the effect of it compounds the error. The iPhone may not have sold as much as they had hoped, but I love mine and I didn’t much mind the price.

It’s a premium product, and it’s a very different sort of device, that’s a little hard for many people to realize they want/need.

Cutting the price this way, and on top of that retroactively compensating customers, sets the complete wrong tone for the product, cuts into profit, and is not likely to dramatically affect sales.