And Here’s The $100 You Just Gave Me, Plus An Extra $50. Thanks, Steve!
by John Paczkowski
Posted on September 14, 2007 at 8:03 AM PT
The $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.’ “
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Comments
It’s just a very good marketing trick.
Typical major-corporation stuff.
Posted by Alexandros E at September 14th, 2007 at 2:11 pmCan’t you just use the $100 credit to buy an itunes gift card from the Apple store? Therefor getting to use it on iTunes?
Posted by Keith Seiffert at September 16th, 2007 at 7:00 am