Thursday, November 6, 2008

iPhone: Pricing

Duangjai Sirsoontorn

Apple Inc. launched 2 models of iPhone on June 29, 2007. The first model was 4GB, which was $499, and the second model was 8GB, priced at $599. Even though its price was quite expensive, many people stood in the long line in front of the Apple stores in New York to buy it.

On September 5, 2007, Apple Inc. annouanced discontinuing production of 4GB model and cut the price of the 8GB model. For people who had bought an iPhone in the 14-day period before September 5, 2007, they were eligible to get a $200 rebate from Apple Inc.

However, customers who purchased an iPhone before that period complained. Finally, on September 6, 2007, Apple announced that customers who bought an iPhone at a high price would receive a $100 credit to be redeemed towards the purchase of any product in Apples’s retail or online stores.

With the slogan “Twice as fast. Half the price,” Apple Inc. launched iPhone 3G on July 11, 2008. There were 2 models: one was 8GB at $199 and the second was 16GB, price at $299.

You can see that iPhone 3G’s generation price was quite low. The reason is that AT&T subsidized research and develop of the iPhone 3G for Apple Inc. However, customers who buy this model have to make a 2-year contract with AT&T at a higher monthly fee.

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