I paid $600 for my iPhone. Am I a sucker?

My editors here at News.com have been poking fun at me for being the first reporter in the newsroom to buy an iPhone--and having no end of trouble getting AT&T to activate the blasted thing followed by paying one-third more than someone would if they went shopping today.

In fact, they thought it would be a hoot for me to write about the perils of early adoption. One editor gleefully told me a moment ago that he had bought a refurbished 8GB iPhone for $350 after today's price drop. Call it institutionalized schadenfreude, with a readbehind from the copy desk.

(Credit: CNET Networks)

So, sure, I'm not delighted about paying $600 for a phone that's being sold for $400 just over two months later. And, as much as I like my iPhone, I doubt that I got $200 worth over the value my old beater phone would have provided during that time.

I'm not alone. One iPhone-related blog said "it looks like Apple doesn't care about early adopters who just paid $600+ no more than 2 months ago." Another estimated, with depressing precision, that the iPhone Early Adopter Tax was $3 a day. Macenstein is "thoroughly pissed" and wants a $100 iTunes gift card (a perfectly reasonable thing for Apple to do, by the way, but more on this later).

Apple's forums are flooded with complaints and scattered reports that store credit or partial refunds are being granted. There's also talk of using a credit card company's price-protection guarantee to seek a refund of the difference, and price protection from Apple or AT&T if you bought it in the last few weeks.

But should people be all that peeved? Not really. It's no secret that computer prices tend to fall: The PlayStation 3 got $100 cheaper this summer, and the Motorola RAZR V3 was originally $500 with a service agreement. Now it's just $50. All of us iPhoniacs knew the price would fall by a third or so.

The only surprise was how soon. I had expected a revised iPhone in January (maybe with a video camera and 3G) to be accompanied by a price cut of around $200.

So am I truly harmed? Nope. I and my fellow early adopters obviously thought that the 8 GB iPhone was more valuable to us than $600 in the bank, or we wouldn't have coughed up the cash. I'd be facing that $200 loss if I wanted to sell my iPhone today, true, but I'm not planning on it. So it's more akin to an unrealized loss, and probably no harm at all if I sell it in a year; Apple merely made my iPhone worth a few hundred dollars less a few months earlier than I expected.

The real harm could be to Apple. Customer expectations are important. Apple adored the publicity that it received when announcing astonishingly high initial iPhone sales. If Apple customers come to expect price cuts after 60 days, early sales of the the Next Must Have Gadget will be anything but stellar.

If Apple needed to reduce the price because of market pressure or to meet its sales goals, that's perfectly understandable, of course. But the reason it should show flexibility in terms of rebates or gift certificates is not simply my unrealized, earlier-than-expected loss: it's to preserve Apple's own bottom line in the future.

[vhase]

Not only that, but...

I didn't pick up an iPhone yet for just this reason - but I believe your January date will still have a new iPhone product, which is yet another reason to wait in my book - I'll bet there will be one with all the new bells and whistles at this current price point.<br /><br />Apple is most likely already blowing out this current phone, with a new one coming down the pipe, even if they are not admitting to it...

[coryschulz]

Actually...

I fully expect a 3G iPhone by the end of October. It will coincide with the Europe launch and will be just in time for the holidays. It will also coincide with the Leopard launch.<br /><br />Many people said they plan to wait till the second gen iPhone, so they can get it at a lower price, and have 3G support, as well as extra little features. I plan to wait till the second gen iPhone. But when it does come out, I'll definitely have my money waiting in my pocket!

[close5828]

Reminds me of the Mortgage industry

Seriously...no-one put a gun to your head and made you buy it, but that didn't stop the greedy loan companies from ******* it out to you anyway.<br /><br />I think what this does (at least in my mind) is "cheapen" Apple's image....that the product price was so over-inflated that it makes ppl think twice before buying.<br /><br />While I do not own an iPhone and planned on doing so next year, I will not buy one now.

[xcess007]

CALL ME A SUCKER

I am not a happy new apple customer at all, good to see I'm not the only one with a taste of bitter apple in their mouth. I expected the price to go down but this soon is just a huge insult. Oh I can only hear the kind of ridicule I will get. Yes, I am a self admited gadget ***** but this is a slap in the face. I will gladly pay $175 to get out of my contract and be done with Apple.

[rcrusoe]

Re: I will gladly pay $175 . .

"I will gladly pay $175 to get out of my contract and be done with Apple."<br /><br />THAT, my friend, would make you a sucker.<br /><br />Today's new top of the line whatever is tomorrow's paperweight. That's the way it's always been. That's the way it always will be.<br /><br />If you've got an iPhone, enjoy it.

[dotmike]

Goodie, lots of cheap iPhones going to ebay!

If you represent that typical anti-Apple protest, then there <br />should be a lot of cheap iPhones flooding eBay.<br /><br />Which is good, because I have many friends who want one but <br />couldn't afford the old (or even new) RRP.<br /><br />They'll buy the eBay iPhones, love them, and Apple will have a <br />whole new batch of fans!

[parmesian]

more than one third more

"My editors here at News.com have been poking fun at me for <br />being the first reporter in the newsroom to buy an iPhone--and <br />having no end of trouble getting AT&#38;T to activate the blasted <br />thing followed by paying one-third more than someone would if <br />they went shopping today."<br /><br />Actually you are paying one-half more than someone would <br />today.<br />they, however, are paying one-third less than you did.<br /><br />400 to 600 -- difference 200 -- one-half more than 400<br />600 to 400 -- difference 200 -- one third less than 600

[rjpotts]

Follow the logic......

How many people were ******** because they didn't want AT&#38;T to be their service provider? How many people said they just wanted an iPhone minus the phone?<br /><br />Apple listened and gave you the iPodTouch. Basically a 8GB and 16GB iPod Nano with the touch screen technology. Charging $100 more for the touch screen is reasonable. Charging $100 more for 8GB more of storage is also reasonable. But at that price the 16GB iPodTouch would destroy the iPhone market. To keep things competitive they had no choice but to drop the price to $399, else there was no incentive to buy the iPhone.<br /><br />I think that we will see a 16GB iPhone for around $499 + 3G network integration within the next 6 months.

[open-mind]

iPhone Price Was NEVER $600

It was $2040. That's the phone cost plus the cost of the cheapest 24 month AT&#38;T service plan. You cannot ignore the cost of the plan. Without the plan, iPhone is a $600 paper weight.<br /><br />So now the same iPhone deal is $1840. Not too much different. Get it?<br /><br />So you're not a sucker. You just need help managing your expenses.

[dotmike]

Actually, mine was

I bought a June 29 iPhone for 600 + tax.<br /><br />Used it for a month as a super-iPod, then when an unlock <br />solution became available, have used it as a fully functioning <br />iPhone ever since (minus visual voicemail).<br /><br />Amount paid to Apple: $599<br />Amount paid to state: $53<br />Amount paid to AT&#38;T: $0<br /><br />I used it on my regular carrier, so I paid the same as my previous <br />phone (a WM5 based device), so it doesn't make sense to add <br />that cost to the iPhone.<br /><br />Hint: I'm not in the US.

[xcess007]

thanks but no thanks

i would gladly give $175 to get out of my ATT contract, they are now in bed with Apple. ATT will be out approx $1585 if I do so. It's worth it to me. It's not even the issue of money. I manage my finances just fine. It's about feeling like Apple slapped me in the face. Yes, I admit it was my mistake for buying one so soon and I have learned my lesson. I am done with Apple. As for having a 600 brick, nope I will sell it and make money on it ;) unlocked phones go for a lot on ebay.

[ngrussell]

get real

This line of reasoning is so faulty and Asinine and tired. Any <br />wireless phone requires a plan from somewhere. And people <br />buying iphones are probably looking for web and email access. <br />We switched to AT&#38;T from Verizon and got two iphones with <br />unlimited web and email for $10.00 a month less than we were <br />paying for one crappy Palm Treo with email and web access I <br />never used, and one crappy Motorola Razr with no web, email or <br />sms plan. So by your stupid reasoning our iphones were less <br />than 600.00 They were only 480 bucks.<br /><br />If you are going to talk about iphone in terms of its two year <br />service price, you have to talk about every phone in terms of two <br />year service price. This argument is FUD.

[newmacgyrrl]

that's so gay

to include the monthly charges is just dumb. By that same logic <br />then my Treo actually cost me more money than my iPhone. My <br />phone/data charges are cheaper now than before.

[aergern]

Those who bought early..

..thought it was worth it at the time. You don't hear people saying " <br />I paid $800 for this DVD player and now they cost $50 " because <br />prices drop. I'll grant you that they normally don't drop this quick, <br />but whatever. I paid large for my BB Pearl and not to long after that <br />my buddy got his for free when he switched to TMO. Was I upset .. <br />nope .. things happen.

[Lodewijk35]

Yes Mr. Declan McCullagh, you´re a big-ass sucker...

also all of you fancy weirdos who think that you have to buy all the state-of-the-art crap that comes to the market, if you can pay $600 for a phone, you can swallow a little of your pride...

[devans00]

Not Taking it Sitting Down

I for one am not taking the price cut sitting down. I've only had the device in had for just over a month. I called Apple to complain. Apparently they are getting slammed because they directed me over the Customer Service. I didn't have the 10-20 minutes to wait on hold at work, but I will be calling later to see if I can recover any of the $200 difference. Nothing may come of the call, but at least I tried.<br /><br />I'm not a sucker, just a trusting consumer who has been duped.

[devans00]

Admission of Guilt

Since Apple offers $100 to early adopters, I take that admission of guilt.<br /><a class="jive-link-external" href="http://www.apple.com/iphone/storecredit/" target="_newWindow">http://www.apple.com/iphone/storecredit/</a><br /><br />The pricing scheme was a marketing stunt that blew back in their faces. I know as well as anyone that technology costs go down. 6 months or more is reasonable. A one third price cut in 2 months reeks.

[M C]

Had to cut price or watch the iPod Touch cannibalize

It's pretty simple, really: when Apple introduced the iPod touch, they realized there are a large number of people who want the screen, wi-fi, browser, and music/video functionality but not the phone.<br /><br />So you put that up at $299 and then try and charge $300 more (PLUS AT&#38;T service) for the additional iPhone functionality?<br /><br />It doesn't compute.<br /><br />There was no other option, aside from delaying the Touch just so that early adopters would feel a bit better about themselves, and that's hardly good business strategy.

[dasapaddock]

Apple is going to give everyone $100 store credit!

It's all here in a letter from Steve:<br /><a class="jive-link-external" href="http://www.apple.com/hotnews/openiphoneletter/" target="_newWindow">http://www.apple.com/hotnews/openiphoneletter/</a>

[bencamx]

Way to go Apple...!

Now...That is simply awesome. Would M$oft or Motorola do <br />anything like this? Guess not.

[STL DWN]

THE BRAVE FEW

I COMPLETELY AGREE WITH THE WRITTER OF THIS COLUMN. ALL <br />OF US KNEW THAT THIS WAS BOUND TO HAPPEN SOONER OR <br />LATER. THATS THE WAY TECHNOLOGY IS. YOU BUY SOMETHING <br />TODAY AND TOMORROW IT IS OUTDATED. YET ALL OF US WERE <br />BRAVE ENOUGH TO GO OUT AND GET ONE, KNOWING THAT IT <br />WOULD BE OUTDATED AND KNOWING THAT WE WOULD FACE <br />THE BUGS. THATS LOYALTY. AND TO ALL THE PEOPLE THAT <br />LAUGHED AND MADE FUN OF US REMEMBER THIS... THE ONLY <br />REAON THAT YOUR PHONE IS SO GOOD NOW IS BECAUSE WE <br />WERE THE ONES THAT HAD TO FIND OUT WHAT WAS WRONG. <br />WITHOUT US, APPLE WOULDNT KNOW HOW TO MAKE YOUR <br />IPHONE BETTER. YOUR WELCOME.

[laura.brammell-211768554162559]

Only because Apple is too paranoid to beta test

First point - stop shouting. No one likes people who shout. If you are new to the internet, all caps=shouting. It is usually considered an act of aggression towards other users. If you intended to shout, then someone obviously needs to take their downers today.<br /><br />Second point - Don't be so smug. I'm sorry you are upset that you got ripped for $200 and can't admit it without getting defensive and claiming that you are the reason that the product is good now. Posts like this are the reason that a lot of people shy away from Mac - they are afraid they will turn into the same arrogant jerks that Apple has apparently turned other users into.<br /><br />Third - If Apple would beta test their products, like other companies do, instead of being so paranoid about "leaks" then all of the bugs would have been taken care of before it went to market. Defending this action and even applauding and condoning it shows how delusional you are. Companies like Motorola, Samsung, BB, MS, etc all beta test, so that when they are ready to sell their product, it is (for the most part) ready to sell. <br /><br />Maybe, on second thought, you should pat yourself on the back for being one of the "brave few" to take it upon youself to pay $600 for a beta product. No one else pays for betas. That must make you special. Or gullible. Either way, Apple is very happy with you for putting money in their pockets while de-bugging their product. Saved them loads, made them more. <br /><br />Funny how they are viewed as the "friendlier" company. Seems to me like all they are really good at is taking advantage of people who are too concerned with style to consider any other factor of a major purchase. I guess they really figured out their market - the naive, easy-to-dupe, more-money-than-brains masses (well, 5% of the masses at least...).

[abe517]

You are NOT a sucker!

I completely agree with you! Nobody forced you to pay the $600 initial price, and yes we all know that electronic gadgets drop price very fast; we just didn't expect it to be this fast. "You get what you paid for", you paid for an 8gb Iphone and thats what you got. Do you regret you have bought it? Do you hate your iphone? I am planning to buy one myself this christmas. Though, my question is: should I wait for the next generation? And I am very aware that if I do so, the iphone that I get will drop its price soon, but I don't think I really care. I know that i will be very content with my purschase, cause I will be getting what I paid for!