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Making sense of the million-dollar iPhone lawsuit

Early adopters burned by Apple's price cut might be tempted to root for Li, but it's actually everyone else who would suffer should she be successful in court.

When Apple announced that it was dropping the price of the iPhone by $200, some jumped for joy and immediately headed out to their nearest Apple store. For others--early adopters who had already purchased Apple's gadget--the price drop was nothing short of a slap in the face. Some were satisfied when Steve Jobs said that these loyal customers would be provided a $100 credit toward their next Apple purchase, but many felt the credit didn't suffice. One of these unhappy shoppers has filed a lawsuit against Apple to the tune of $1 million dollars.

It's unclear how the litigant, Dongmei Li, plans to justify a million dollars in damages over a $200 price drop, but Li's argument is that "the price reduction injured early purchasers like herself because they cannot resell the product for the same profit as those who bought the cell phone following the price cut," according to CNN's account. So I guess that comes out to $200 in actual losses and $999,800 in pain and suffering.

Frivolous lawsuits are nothing new; some have even won in court. Readers may recall how a a 70 year-old woman was awarded a $2.7 million dollar judgment after spilling scalding hot McDonalds coffee on herself. Of course, she did receive 3rd-degree burns over 6 percent of her body and to the best of my knowledge Li only suffered through the embarrassment of spending more money than she would've had she waited patiently. Perhaps she'll soon file a suit against CNN for bringing attention to her petty suit. I know I'd deal with far more harassment about suing Apple than I would for paying too much for my chic cell phone.

Everyone knows that technology drops in price over time. Sure, it's not every day that a gadget's price is slashed by 40 percent in only two months, but companies are generally allowed to set their own prices and to change them at will. If six months had transpired before the Apple lowered the price of the iPhone would Li still be suing? What if a year had gone by?

While those early adopters that got burned when Apple dropped its price might be tempted to root for Li, it's actually everyone else who would suffer should she be successful in court. If lowering prices were made illegal, just think about how much more you'd pay for everything. Older model computers would still be just as expensive as the latest offerings, shopping malls would have to abandon sales events and even the local grocery store would be prohibited having a special on canned corn.

Sure, Li would be a million dollars richer but how much poorer would you be? I wouldn't worry to much about it though -- I've got a suspicion Dongmei Li doesn't have a chance in hell of winning this one.