the iPhone sickness (2010 and counting)

$599 to $399, 68 days after product launch.  Remember that, back in 2007?  I wrote most of this post back in 2007 when the iPhone first came out, and found that much of what I wrote is still true today.  Here it is:
the iPhone, circa 1986
It was bound to happen. Like a million consumer electronic devices before it, Apple dropped iPhone prices from $600 to $400 68 days after product launch. Angry first-adopters screamed about refunds (and got one). Breathless wait-and-see types are now vibrating with barely repressed joy at the thought of claiming one of these ‘bargains.’

I am no fan of Apple. I know there is a cult behind Apple but some of the frenzy behind iTunes, the iPhone, the iPod and the Mac has always eluded me. I get the general principle. They look nice and they do their stuff with flair and they aren’t Microsoft. But let’s face it – if I told you I had a great car that wasn’t susceptible to typical car problems, and looked really cool, but at the same time used a different kind of gasoline that wasn’t widely available, needed car parts that only one manufacturer produced and cost twice as much (or several multiples as much) as your current car, would you be in a hurry to upgrade? Since 99% of my computer time is now online, it’s hard for me to understand why I would want to pay a premium (and suffer so much incompatibility) for an Apple. I am sure someone reading this on an Apple will have a good argument why Safari browsers are better than Firefox or Chrome… ?

But when I had to really stop and wonder was when a $600 phone became a source of such consumer bloodlust. Is this what America has come to? $600 phones? Are there that many people out there with that kind of money to spend on phones? That’s a rhetorical question, since I know that many people will buy an iPhone while ignoring their upcoming credit card payment or saving for retirement. But just stop and think about that statement: something you can get for free like a cell phone is being sold for $600 because it adds functionality so you can play YouTube videos from lonelygirl15 on a one-inch screen!

The concept of something-for-nothing that comes out of offering an after-the-fact refund for a price change when none was implied in the sale is terribly annoying to me. Should I get a break on my house if the prices in the neighborhood don’t go up as fast as they did the year I bought the house? Should I be able to go back to Pathmark and ask for $1 off a carton of milk if they offer a sale the day after I bought it?

Of course I can ask. That’s my right as a consumer. I am willing to bet more stores would consider whether it was worth their trouble. I remember buying a video-editing device from amazon and seeing a rebate offered before it even shipped that wasn’t available at my time of purchase. In that case, Amazon acted quickly to grant the rebate when I pointed it out, because it was a matter of hours. I just don’t understand why Apple felt a need to cave in to demands for refunds 2 months later. You can’t convince me that your average Apple first-adopter isn’t going to rush out and buy an itouch or an iToaster the second it’s offered, no matter how many times they get screwed. Apple should have said hey, $200 is your instant gratification premium! This is your premium for being among the touched – the divine – the ubercool!

It’s this kind of consumer mentality that leads almost directly into consumer debt. I can whip out a credit card and buy something now for $400 but pay $200 on it in interest because I don’t have the cash on hand to pay for it. Or, I can wait 2 months and pay $400 in cash. I know that this seems obvious to most of the people who read personal finance blogs, but I think a large segment of America just doesn’t get it. At all.

I have learned that you have to stop and think before you buy stuff. I have also learned that rushing out to buy stuff is a good way to retire poor. The iPhone and the iPod and so many of Apple’s products have become so trendy and so cool I continue to wonder when a backlash will come and they will become uncool, and people will realize that there is no need to pay a premium simply based on design. I suppose it will happen when someone else comes up with a neater, cooler product and not before, rather than when the American consumer suddenly realizes Apple – like a million other “brands” – is giggling all the way to the bank.

5 comments

  • Money Beagle

    I'm the same way, I can appreciate how enthusiastic the Apple lovers are, but I have never joined them. I prefer to get a product that doesn't have the Apple name, does the same thing, and costs 80% less, and be just as happy!

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  • Lazy Man and Money

    I agree with you in principle, but the iPhone (and Palm and Android) devices are about a lot more than watching YouTube on a small screen. They generally make people more productive. It's not as much a cell phone as it is a traveling computer.

    The incompatibilities have died down a lot since 2007 (Firefox and Chrome are available on Apples).

    The price in that short span in 2007 is not close to where it is today ($600 vs. $200). Considering the prices of GPS systems alone in 2007, these phones look like a bargain if you do nothing else.

  • Your car analogy is wrong. A Mac Mini can be had for 700 bucks. You can buy memory or hard drives for Macs from anywhere.

    Yes they look cooler than other computers BUT they are reliable, dont crash, get viruses or spyware, and they dont become “flakey” after 6 mos, requiring a reformat and reinstall of the OS.

    I bought my Mac Pro (comparable in price to an equivalent PC) 3 years ago and will never buy a Windows based PC ever again.

    Mac computers are better. End of discussion. And no I am not a fanboy.

    As for the Iphone I do agree with you. Overpriced and not worth the money. Rate plans are a rip off, and my Blackberry does me just fine.

    Actually a pay as you go cell phone would serve me well but my blackberry rate plan is hard to beat.

    I will say though, that all Apple products are very easy to use. Unless you have used their products you will not understand.

    Apple is the best at creating products, and then convincing people they NEED them.

  • Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.