iPhone Buzz Turns Negative: Gimmee my $200!!

Oops. Yesterday Steve Jobs announces new iPods and — much to the collective chagrin of thousands of Apple customers — drops the price of the just over two month old iPhone by $200.

Last evening I lurked around the Apple Support Forum (iPhone section) and watched the hundreds of posts and replies appear and disappear almost instantly. It was as though I was watching a chat window instead of a forum posting area. People are amazingly upset by this drop and even Mr. Pragmatic (me) have to admit being quite surprised by how fast this occurred since I own two of them.

I also posted in the iPhone section but had the posts removed instantly and emails arrived each time saying:

Your message was removed for being in violation of the Apple Discussions terms of use.

From the terms of use:
“Unless otherwise noted, do not add Submissions about nontechnical topics, including: Discussions of Apple policies or procedures or speculation on Apple decisions.”

While the purpose of these forums is to allow people to support one another (and do it for free so Apple doesn’t have to), the removalsappear to be random and subjective as many nontechnical topics remain. What strikes me is that this forum is the perfect place for the rants, the vitriol, and the whining to occur in a place where it can be contained. Instead, it’s spilling out all over the place as people like me will post about it instead of placing this sort of stuff within the walls of Apple Support.

There are reasons for everything…including this huge price drop…and the market space the iPhone plays within isn’t one for the meek.

My personal view is that Apple has entered THE most cutthroat and competitive business on the planet. According to the analyst firm IDC, there were 256.4 million mobile phones shipped in Q1 of 2007 (yep…that’s a quarter of a billion units in one calendar quarter) and over 1 billion were shipped last year. The smartphone segment of this (in which the iPhone falls) saw 80 million of these converged devices shipped in 2006 and Nokia in a leadership position. Of course, any company that makes electronics seems to be shipping mobile devices.

Let’s put this into perspective: the mobile smartphone market is a seriously huge one and is a space significantly more competitive than the one for personal computers. IDC also tracks worldwide PC shipments (all personal computers) and projects 257.4 million computers will be sold worldwide for the entire year of 2007.

So just to emphasize this point: all personal computers sold and shipped globally in 2007 are equal to just one calendar quarter of mobile phone shipments worldwide. Which market should Apple pursue with everything they’ve got?

As a shareholder, I want Apple to thrive and to be a successful player on the world smartphone stage. As a customer just burned, I’ll probably wait in the future before buying and this negative iPhone buzz won’t be forgotten anytime soon. What happens next time Apple hypes and releases the next big thing? I doubt even the fanboys will line up the night before to buy and undoubtedly many will just wait until generation 2 ships rather than be an early adopter stung less than 70 days later.

Apple needs to do something to combat the ill will this material drop has caused and many people are talking about it quite publicly. Whether people are big babies, pragmatists understanding both sides of why the price drop occurred, or fanboys delighted more people can now afford to join the iPhone club, there is a spectrum of emotional reaction that runs completely and totally counter to what Jobs said yesterday about how people feel toward the iPhone, “The surveys are in and iPhone customer satisfaction scores are higher than we’ve ever seen for any Apple product,” said Steve Jobs, Apple’s CEO.

Steve….bet the results would be different if you took another survey.