iPhone Price Drop

The New York Times so far seems to be treating the new iPod touch as today’s big news, but to me the significance of that is dwarfed by the $200 price drop for the iPhone.

I can’t recall any product ever falling in price so much so quickly, and it defies logic that it was Apple’s plan from the beginning. (What would be the purpose of screwing customers for an extra $200 for only two months?) My guess: iPhone sales are good, but not great. Apple doesn’t want any grey area here: they want the iPhone to be a bona fide, indisputable hit, and this is how they think they can do it. I think they’re probably right.

Regardless, an interesting day. In part because Apple has some great new products, in part because the rest of the industry is falling even further behind, something I don’t think anyone could have predicted. Palm CEO Ed Colligan–seemingly the least qualified CEO of any major tech company today–must be sweating. Even Steve Ballmer–though probably not sweating–must be a little stunned.


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