The Real Reason Apple Slashed the iPhone’s Price

The moment Apple announced a $200 price cut on the 8GB iPhone, the blogosphere lit up. The early adopters, feeling betrayed by Apple for slashing the iPhone’s price just two months after it’s debut, raised enough of a racket to get Steve Jobs to issue them $100 Apple gift certificates. The financial analysts took Apple to task, reading the price cuts as a sign of weak iPhone sales, sending the stock down more than 5%.

Missed by all was the real reason Apple slashed the iPhone’s price.

Let’s face it. Any moment now Already, users will be able to can unlock their iPhones with a simple software tool (click here to see a video of the iPhone unlock process from start to finish). Apple intends to capitalize on it… and a cheaper iPhone is precisely the way to do it.

Apple could engage in an arms race against the unlockers, but that would simply create ill will against the company. Relocking the iPhones through software updates would simply create hordes of angry users. Suing the unlockers is another possibility, but the law seems to be on the side of the phone owners (so far).

Apple has simply decided to join the party and lower the iPhone’s price so that, once the software hack is out, everyone can and will buy an iPhone.

How AT&T takes this is another story. They do, after all, have an exclusive arrangement with Apple for two years. They’re still the only ones able to offer Visual Voicemail and iTunes activation. Whether that’s enough for users to prefer AT&T remains to be seen.

What do you think?

  • Hello Carlos
    This is Brian I am having trouble contacting you please call me at my cell, I have not recieved any emails from you.
    Thank you
    Brian

  • Hello Carlos
    This is Brian I am having trouble contacting you please call me at my cell, I have not recieved any emails from you.
    Thank you
    Brian