the iPhone sickness
$599 to $399, 68 days after product launch
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 never broke down, 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 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…
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.