This is what Shawn Morton would look like if he had been made of LEGO -- the personal website of Shawn Morton
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Thursday, September 6, 2007
The iPhone price cut was brilliant
Much of the talk around the office today has been about the iPhone price drop. Early adopters are upset. Everyone else is having a nice chuckle at their expense.

However, the price cut is actually much more interesting (and clever) than it appears on the surface.

Sure, dropping the price of the iPhone by 33% only 68 days after release is going to upset people who shelled out $600 for one. However, it was worth it (especially now that Apple gets to swoop in a play the you-complained-we-listened card that they had up their sleeve all along). What the price cut (and the surrounding media attention) did was get a lot more people to think that $399 is a good price for a cellphone.

You can walk into any cell provider's store, sign a contract and get a free phone. You can even get a pretty good one if you're willing to pay $100-$200. However, Apple was able to convince those who thought $599 was insane for a phone that $399 is a bargain by putting all of the emphasis on the discount.

Damn, that's good stuff...

[UPDATE: PBS' Robert X. Cringely agrees with me about the motivation and the strategy behind Apple's price cut. Thanks to Todd Earwood for pointing me to his article.

About Shawn Morton

Married father of 6; VP of Social Media at JPMorgan Chase; gluten-free; gadget enthusiast; hair metal aficionado; #Movember man View more on LinkedIn.