Apple Bails on iPhone Pricing

There are signs that Apple's long-held premium pricing approach may have gone over the top with the iPhone. The company is dropping a low-end model, cutting the price of the 8GB one by as $200 - and for those who bought early, missed the price break, and got angry with all the documented problems (non-replaceable batteries and others), there's a $100 store credit.

But you've got to wonder what's going on - at least, I do. Apple would never have cut the price if it thought it could continue to get the premium, particularly through the holiday buying. Particularly in high tech, you drop prices to clear out an old version and make way on store shelves for a new one, or because, somehow or other, you've really screwed up. I think it's clearly the latter, in this case. The move will tick off the early buyers - who might not mind if some significant period of time had passed and they had a chance to upgrade (and if a $100 Apple store credit could actually buy much of anything) - and it starts messing with Apple's positioning as worth the extra money.

This isn't going to batter Apple, but it does reveal that maybe someone took the old magic a step too far. Cool is fine, but you'd better also providing people with something of value. How do you think the sense of cool came about in the first place?