John Paczkowski

Recent Posts by John Paczkowski

And Here’s The $100 You Just Gave Me, Plus An Extra $50. Thanks, Steve!

applecredit.jpgThe $100 iPhone credit Apple issued this morning won’t go a long way in the Apple Store, but it will likely go a long way in showing the company’s goodwill toward peeved early adopters who paid $599 for the iPhone only to see its price drop to $399 a few months later.

Which makes it not just good public relations, but a shrewd effort to drive more business at Apple’s stores as well. Because many of those $100 credits (which cannot be used on iTunes) will likely be used toward the purchase of products costing more than $100. And those that are used on products costing less probably have higher margins.

“If they spend less than $100, they get less out of the credit,” Ezra Gottheil, an analyst at Technology Business Research, told PC World earlier this week. “I suspect some of Apple’s lowest-price items, like the Shuffle and accessories-like cases, have much higher margins than say, the MacBook. And if they spend more than $100 [at the store], Apple is getting the profit on the purchase beyond $100. Long term, this is a big win for them. With the unqualified apology enhancing the effect of respecting the customers, it’s well worth [the $25 million]. It may be the best screw-up since ‘New Coke.’ “