It’s not $200, it’s the differentiating factor

Now that the dust has settled a bit on the $200 price reduction on the much popular Apple iPhone, I think we should give it another look, from a slightly different perspective. Apple’s move caused a massive uproar from the early adopters. But price reduction is not something that happened for the first time. Cellphones get cheaper every other day, sometime even reaching negatives. So what was so special about iPhone? I think it was the differentiating factor, and Apple took that away from its early adopters by making the iPhone considerably affordable.

Apple early adopters are the group of people who are willing to shell additional dollars to get their hands on the latest Apple product, before the masses start adopting it. It is that virtual cult membership that gives them a sense of satisfaction and pride, to say the least. Now when the price conscious buyers got a hand on the iPhone after the price reduction, helping Apple to reach the target of selling 1 million iPhones by September, this cult pretty much dissolved in less than 12 weeks.

Apple tried to calm down the early adopters, its maven community, by giving a $100 store credit. Though it did make some early adopters happy, but for some reason, I think Apple did not hit the bull’s eye this time around. The basic thing that Apple did not fix with this move is the disappearance of the differentiating factor for the cult. How Apple could have fixed it even better? By creating that differentiator, or should I be more clear by saying clearly identifiable differentiator. It could have been an exclusive screen saver or wallpaper on iPhone, an exclusive set of ring-tones only to be available for the early adopters, a couple week early availability of the new apps coming out on iPhone or something else. Though this won’t have discounted for the $100 store credit, but the additional set of bells and whistles would have kept the loyalty of the “very” early adopters more intact.

But then, there is another perspective to take here – by making the iPhone more affordable, Apple increased the number of early adopters to a million, creating a stronger base for future releases…

One response to “It’s not $200, it’s the differentiating factor

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