New York resident files quixotic suit over iPhone price cut

The erratic play of the New York Mets appears to have spurred at least one city resident and iPhone owner on a perplexing quest for justice.

Either the iPhone price cut is making people wacky, or there's something in the water in Queens.

(Credit: CNET Networks)

Dongmei Li, a resident of the borough of Queens, sued Apple earlier this week for "price discrimination" brought on by the $200 drop in the price of the iPhone announced earlier this month by Apple CEO Steve Jobs. Li names Apple, Jobs and AT&T as defendants in her suit, filed on Monday and spotted by AppleInsider.

The claims in the case make about as much sense to me, a long-suffering Mets fan, as the continual game of bullpen roulette played by team manager Willie Randolph, who also plies his trade in Queens (for now). According to documents filed in the U.S. District Court for the Eastern District of New York, there are three central claims to Li's case.

The first? "Apple's price reduction has hurt early purchasers' competition with Apple because they cannot sell it for as high a profit as they could have before the price cut." Li says she bought the $499 4GB model, discontinued after the price cut, on iPhone Day. Obviously, nobody's going to spend more than $499 on a 4GB iPhone today when they can go out and buy the 8GB one for $399, so Li's potential profits are indeed dashed.

But it's not like the early iPhone resellers made substantial profits on their purchases in the first place. And is Apple really obligated to take into account the potential profits of individuals reselling their iPhones when making pricing decisions? I'm not lawyer, but that theory seems a bit off the straight and narrow, kind of like a Guillermo Mota fastball.

The second one is even better. "Apple's price reduction has hurt early purchasers' competition with later purchasers because they cannot resell their iPhones for as low a price as later purchasers may." Why not? What exactly is preventing you from selling your iPhone for as low a price as you want?

If you're serious, Ms. Li, I'll give you ten bucks for it. If that's too high, I can come down to $5. But that's my lowest offer.

That's not even my favorite one. In another claim, she advances one of the most creative conspiracy theories I've read yet concerning Apple's motivation for the iPhone price cut.

Both the Mets, and this lawsuit, could use your prayers.

(Credit: Flickr user saragoldsmith)

First, she alleges that Apple is losing money on each sale of a $399 8GB iPhone. Just for the sake of argument, we'll assume that illogical unsupported statement is accurate. So, then, what would be Apple's motivation?

"Apple is selling its iPhone for an unreasonably low price to hurt competition between early and later purchasers so that the early purchasers cannot resell for as high a profit as they could have without the price cut. Apple is selling its iPhone for an unreasonably low price to hurt the competition that purchasers pose to it from reselling their iPhones."

There you have it, folks, it's all become clear. Apple wasn't trying to sell more iPhones during the upcoming holiday season. They weren't trying to kick-start demand to hit their sales targets for the quarter. They weren't trying to milk profits out of their faithful early adopters. They are trying to rip the heart out of that nonexistent iPhone resale market to deny profits to individuals who thought they were Apple's resellers.

I thought New York was a hip, tech-savvy place these days. There's no shortage of iPhone owners irked by the steep and sudden drop in price, but this is the wackiest iPhone lawsuit I've seen since that guy from suburban Chicago who thought Apple was forcing his battery to die after a year. Probably a long-suffering Cubs fan.

People, it's just baseball, let's not let it drive us to commit wild acts of litigation. However, I can understand what it feels like to battle against the odds. After all, ya gotta believe.

[Wind_Freak]

Breeding license

Lawsuits like this should be an automatic revocation of rights to <br />breed.

[brettlea]

or to...

breathe. Where do people come up with this stuff? I hope the <br />lawyer got a nice big retainer before he took the case.

[fire941]

iPhone Price Cut

Whenever someone has to be the first in line to buy a new product, <br />a price drop is the risk he or she takes. I'm sure the price drop also <br />pissed off the people that spent $1,000 on eBay for the iPhone.<br />A lesson learned I hope.

[ResinNation]

AHAHAHAHAHAHAHAHAHAHA!!!!

Are you kidding me?!?!?!?<br />HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!<br />I'm trying to think of who's crazier- the reseller that thought up <br />such a ridiculous suit, or the lawyers who actually think that this <br />case could EVER stand up to Apple's legal team.<br />Can't you lose your license to practice law on grounds of general <br />stupidity? <br />(You should.)

[aka_tripleB]

I'm kind of laughing at you

For ever thinking that a judge would ever even hear this case. Well, it's not so much as laughter than a smirk. It wasn't even a smirk that was audible. You probably should have not even read this comment. Oh, well! Now I'm just wasting your time writing nothing. So, you can stop reading now. Ok, now I actually ran out of stupid things to say. Why are you still reading this? Stop it! I said stop it! No, you! Well, I've showed you. Ha! I probably shouldn't comment when I'm this tired. No, you can't laugh at. For the life of me! It's 5:15 a.m. Now I'm really going to bed.

[imacpwr]

Another frivolous lawsuit clogging the American legal system..!!

What..? she didn't claim the thing burned her inner thighs as she <br />drove off after the purchase because she placed it between her legs <br />and it's over hot fluids spewed out..<br /><br />After that article I think I need to spew as well....

[theiway]

How to join this lawsuit?

Finally, a lawsuit that makes sense! When Apple reduced the price of the iPhone 2 months after release, unprecendented even in terms of the technology sector (Apple likes to mess with its customer, especially the core base), Apple made a weak, yet accept overture by offering $100 store credit. Of course, the store credit cannot be used with iTunes (oh lovely for Apple to mess with its customer yet again).<br /><br />However, when Apple decided to discontinue the 4GB iPhone, it screwed every person that owens a 4GB iPhone as it greatly devalued the phone far beyond the price drop on the phone. To make things right, Apple should have either doubled the store credit, or offered an upgrade possibility. Apple has offered neither. In fact, it has been very nonchalant and characteristically standoffish about making any additional overture to owners of the 4GB iPhone. That is outrageous!<br /><br />I would be glad to join this lawsuit, as I know at least 4 more people I know would as well. I will never buy another product from Apple again after this deliberate lack of service and cooperation by Apple. I already spent over $200 on iTunes since buying the iPhone, but will never buy again. Apple lost my business when it comes to their computers (as I was going to buy an iMac), phones, iTunes, and other products. My sentiments is shared with other members of my family, and a few friends, some of which own the 4GB iPhone. For anyone to support Apple is indicative of the fact that they own shares in Apple, and are worried about a drop in the overinflated stock. I am done with Apple, and I am glad to see the competition offering alternative, and very viable services and products.<br /><br />How can we join the lawsuit?

[Jay Jennings]

Oh, please

At first I thought your post was sarcastic, but by the end I believed you were being serious.<br /><br />Let me ask you a question: How has the price drop affected your ability to use your 4GB iPhone? It still makes and receives phone calls, yes? It still plays music? You can still surf the web? Etc.?<br /><br />So the price drop didn't do ANYTHING to your ability to use the iPhone you purchased. Is that right?<br /><br />You don't have a legitimate beef. Period.<br /><br />Jay Jennings

[cartablst]

I'm sorry but. . .

Did you buy the phone to use or to sell? Maybe it's just me, but when I buy a phone, an iPod, or whatever, I buy it so I can use it, and whether I'll make a profit on a resale is completely irrelevant. <br /><br />God. You're like the ******** who buy up concert tickets for shows you don't care about and then resell them on eBay for three times the price. No sympathy.

[lantzn]

Here's How

By holding a gun to your temple and pulling the trigger. Please proceed and let us know how it turns out.

[OrderlyRoom]

Listen Up Knuckleheads

You truly wanted the iPhone enough to pay $600 for it, then the responsibility rests with you. If that's not enough, read the article again so you get a good idea of the character that initiated this lawsuit and individually represents it. The judge ought to throw the gavel at her and reward her for setting another fine example of American greed with community service to set her straight. Just take your $100 voucher, and buy yourself something nice. I wonder if the Apple Store has a sale on sensibility... I guess I'll find out when I'm down there to buy a $400 iPhone.

[theiway]

Oh my!

I can see from your well-written response that you are the poster child for intelligence. <br /><br />Clearly, you are yet another Apple shareholder who can't take criticism about Apple and its overvalued share price. I thought Apple fans were more intelligent than other fans of companies. It is clear that you are not one of them.

[makalan]

Tom Krazit

Tom, <br /><br />You ask why early purchasers' cannot resell their future iPhones for as low a price as later purchasers may.<br /><br />The answer is simple. They need to recoup the cost of previous losses. Therefore, future prices must be higher. A business that had to get rid of inventory by clearances are less able to compete with those who consistently made a profit.<br /><br />You should think before you write, especially for an article with such negative tone. I expect better from C|NET.

[Tom Krazit]

She's not running a business

At no point in the complaint did Ms. Li attempt to prove that she was running any kind of business, any kind of Apple reseller operation, or that she in anyway relied on iPhone resale profits as a business venture.<br /><br />So, she's just an individual.<br /><br />I'll admit I'm not a lawyer.<br /><br />But if individual consumers are permitted under our system to sue companies asserting lost profits because the company dropped the price of their product too quickly, we're doomed. The HDTV industry would go out of business, for one, and the PC industry would certainly look different.

[lektrone]

Add another claim

The price drop has also reduced the satisfaction I get from using expensive products. Now that the price has dropped I need to be compensated for the emotional suffering when I realize that the phone I'm using is cheaper than I would like it to be.

[Jay Jennings]

Oh, please

At first I thought your post was sarcastic, but by the end I believed you were being serious.<br /><br />Let me ask you a question: How has the price drop affected your ability to use your 4GB iPhone? It still makes and receives phone calls, yes? It still plays music? You can still surf the web? Etc.?<br /><br />So the price drop didn't do ANYTHING to your ability to use the iPhone you purchased. Is that right?<br /><br />You don't have a legitimate beef. Period.<br /><br /> Jay Jennings

[raptH1nk]

Does quixotic mean....

retarded?

[Ghent2007]

dongmei li?

yup i believe it is the same guy that raised his fist and waved to the reporters when he walked out of the Manhattan store with an iPhone.

[Seaspray0]

why it should fail

Here's a valid defense... The buyer had the ability to actively use the phone since the date of purchase (whether they use it or not). Had the buyer waited until the price dropped, they would not have had that ability. In essence, by buying the phone before the price drop, the purchaser has received the ability to access a service between the date of purchase and the date that the price dropped. Unless the purchaser can claim the phone or associated cellular service was defective in a way that denied the ability to use the phone during that time, apple is justified in the difference in price between the two times.

[rmdunton]

Gotta have it now

Anyone ever heard of the "gotta have it now fee"? It's the one that people pay because they have to be the one of the first ones in their area to have a new product? It almost always is applied when new products (especially electronics) are introduced to the market. If you wait a while (maybe months, maybe a year or more), the gotta have it now fee drops off making it a more reasonable purchase. Too bad for all those people that bought IPhones and a couple months later found out that the price had dropped substantially. You had to have it when it first came out and now your upset that you had to pay the "gotta have it now fee". I don't think Apple owes any of you anything. This happens with all new products. Get over it.

[sam adkins]

To the author

I agree with you: Li's arguments are nonsensical. But I do want <br />to point out that I believe you misunderstood one of Li's claims.<br /><br />The second point she made, about the difference in early <br />purchaser's and later purchaser's competition and price was <br />misunderstood by you. It's apparent that she is stating that <br />early purchasers can't resell iPhones for as low a price as they <br />want, because then they won't earn a profit. Whereas later <br />purchasers can resell the product for a lower price than early <br />purchasers and earn a profit because they paid less. <br /><br />Of course she wouldn't sell it to you for $5. That is a really silly <br />statement.

[Tom Krazit]

I don't think she has a point at all

I understand that if you bought something for 500 bucks, somebody who bought it for 400 stands a chance to make more of a profit.<br /><br />But she's trying to say that this somehow harmed her. She's trying to claim that any time someone drops prices, she's harmed because she bought it earlier than somebody else who waited for the sale price.<br /><br />Sure, you can claim that, but good luck with that suit. Fixed prices for everyone until the end of time!

[cartablst]

Hee!

Exactly! I suspect this is what's underlying a lot of dissatisfaction. "Oh, my super-exclusive gadget is now available to the masses, WOE."

[matt100psi]

how stuff works

She thinks they initially started selling high so people couldn't re-sell iPhones?<br /> <br />The only reason people are able to re-sell items at ridiculously high prices (like the PS-whatever when it first came out) is because the manufacturer miscalculates demand. I don't think Apple intentionally overpriced the iPhone to prevent overpricing if they miscalculated demand. I think they did their best to make sure all their calculations (quantity produced of each type, price, etc.) were correct because that's how THEY make the most money. Anyway, if 2nd-hand resale overpricing does occur, it doesn't matter to Apple. They still sold all their units at their price point. It's just indicative of the fact that they could have made more by setting their price point higher or making more units. <br /> <br />Also, demand IS higher when an item is first released, so supply-demand curves dictate that the price SHOULD be higher. The fact that it usually isn't is why there are lines to get the new items the first day. If companies consistently priced items higher during the first week of release, then gradually lowered the price as time passed (say $3/day for the first 30 days), people wouldn't have to wait in such severe lines if getting the product as early as possible were a priority to them. But maybe that kind of forecasting is too difficult, or maybe they don't want customers to spend extra time thinking about whether or not they really want to buy a product. <br /> <br />Anyway, didn't Apple offer a retroactive rebate for customers who purchased the iPhone at the higher price? I thought I heard from one such customer that they did. Incidentally, he was saying he thought they shouldn't have offered the rebate, but didn't have a problem with the price drop. <br /> <br />If they didn't offer a rebate to initial buyers, I think they'll feel the consequences HARD on their next big release.<br /> <br />Matt

[surroundedbymorons]

suck it up

Dongmei Li - You represent the worst of this country. You think your iPhone purchase has damaged you to the tune of $1M?! Right. I wish we could throw your lot into the greedy pig jail for even bringing this rubbish up. You aren't entitled to anything! You bought it at the agreed price. You didn't have to, and you didn't have to agree to the terms of the contract. You could have waited or not gotten involved. You should be happy to get the credit. Seriously, you need to retract this this thing pronto and rethink your pathetic philosophy of life.

[lantzn]

Amounts to hurt pride.

They are the ones who HAD to be first to own an iPhone thus giving them their bragging rights. They immediately went out to every individual possible and flaunted the device in front of them letting everyone else know how much superior they were as humans. Then the price drop came and they have had to deal with all the sarcastic comments about them being idiots, fools or similar. That is the "damages" that they claim they have experienced and therefore feel the need to be compensated.<br /><br />Don't you all now feel sorry for them as well,now that you've read the truth?

[agentisis]

Is this the same woman?

<a class="jive-link-external" href="http://clearwisdom.net/eng/story/newyork/ny14-li-dm.html" target="_newWindow">http://clearwisdom.net/eng/story/newyork/ny14-li-dm.html</a><br /><br />If so, then it sounds like she has fallen off the Falun Gong wagon.

[mtbking]

thats too bad friend

let me guess, you were probably one of the thousands of people who stould in line to get the iPhone immediately. since you have so much time on your hands to do so, and furthermore, since you have the time to try and sue Apple for $1 million dollars, you should really get a life. It is business, naturally, whether it is 1 day or 8 years, the price of a product will come down, this gives you no right to sue a company because you want to. They saw it fit to reduce the price so they did. Sorry you got the ****-end of the stick. In that time that you stould in line, and in the time that you are taking to get your lawyers and offense together, you could have made 10 times the money you lost since you decided, "oh, I have to have that new phone." Get over it, companies drop prices. It is unethical for you to sue a company for dropping its prices. I hope you go bankrupt from spending too much money on lawyers. You are ignorant. If everyone on earth sued a company for dropping their prices to your disadvantage, there would be no world market, and you wouldn't even have your stupid iPhone. Get a friggin life you idiot, and get a job. a real one, not one that consist of sueing someone for a million dollars, haha. you lost, what? 200 bucks or something. get real, please.