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.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom.
breed.
lawyer got a nice big retainer before he took the case.
a price drop is the risk he or she takes. I'm sure the price drop also
pissed off the people that spent $1,000 on eBay for the iPhone.
A lesson learned I hope.
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!
I'm trying to think of who's crazier- the reseller that thought up
such a ridiculous suit, or the lawyers who actually think that this
case could EVER stand up to Apple's legal team.
Can't you lose your license to practice law on grounds of general
stupidity?
(You should.)
drove off after the purchase because she placed it between her legs
and it's over hot fluids spewed out..
After that article I think I need to spew as well....
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!
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.
How can we join the lawsuit?
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.?
So the price drop didn't do ANYTHING to your ability to use the iPhone you purchased. Is that right?
You don't have a legitimate beef. Period.
Jay Jennings
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.
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.
You ask why early purchasers' cannot resell their future iPhones for as low a price as later purchasers may.
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.
You should think before you write, especially for an article with such negative tone. I expect better from C|NET.
So, she's just an individual.
I'll admit I'm not a lawyer.
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.
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.?
So the price drop didn't do ANYTHING to your ability to use the iPhone you purchased. Is that right?
You don't have a legitimate beef. Period.
Jay Jennings
to point out that I believe you misunderstood one of Li's claims.
The second point she made, about the difference in early
purchaser's and later purchaser's competition and price was
misunderstood by you. It's apparent that she is stating that
early purchasers can't resell iPhones for as low a price as they
want, because then they won't earn a profit. Whereas later
purchasers can resell the product for a lower price than early
purchasers and earn a profit because they paid less.
Of course she wouldn't sell it to you for $5. That is a really silly
statement.
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.
Sure, you can claim that, but good luck with that suit. Fixed prices for everyone until the end of time!
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.
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.
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.
If they didn't offer a rebate to initial buyers, I think they'll feel the consequences HARD on their next big release.
Matt
Don't you all now feel sorry for them as well,now that you've read the truth?
If so, then it sounds like she has fallen off the Falun Gong wagon.
- thats too bad friend
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by mtbking
October 2, 2007 8:37 PM PDT
- 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.
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