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And on day 67: $200 iPhone price drop and new services

"Beat Goes On" event showcases a whole lot of news--namely a $200 price drop for the iPhone, and a whole host of new services.

Steve Jobs certainly knows how to surprise and saturate. Along with other Applephiles, I was following the live coverage of the latest Apple/iPod/iPhone news via Gizmodo, which couldn't refresh fast enough!

So much to digest, but the main points:

(1) iPhone price drop!? The 8GB iPhone's price fell markedly with this announcement to $399. (Say buh-bye to the 4GB model). Boy, I sure could have used that $200 for the past two months, but it's an inherent risk of being an early adopter. So there is a $100 premium for the phone part of the iPhone as the iPod Touch 8GB model is $299 and the 16GB is $399. With this new and improved price point, you will see a lot more people (and their sisters) with an iPhone! Hopefully, this means more support, connectively and market saturation. Less likelihood of it getting stolen. Ah, delicious.

(2) iPhone update--this month! Our long national nightmare without a major update ends, or does it? To be included, the iTunes Wi-Fi store--music on the go. What's more, it'll sync back to my main desktop iTunes unlike other types of phone-based purchase stores. Finally, when I hear that "it" song, oh say in Starbucks (in NY, Seattle or SF this year), I'll be able to buy it then and there (provided there is a decent Wi-Fi connection). By 2009, all Starbucks with Wi-Fi are supposed to have this service. Talk about locking in a captive market and creating market path dependence! I do have to admit the Starbucks thing is cool, but it seems a bit creepy. Think about it: now you can get a caffeine-fix and a music fix at the same time--what a brilliant business model: the quest for caffeine is likely to lead to an impulse buy.

(3) iPhone-lite--ermm, the iPod Touch. An iPhone without the phone part. 16GB for $399? Is that it? There's no reason for iPhone owners to get one in my mind (apart from being ticked about the price drop). Size and capacity have always been a sticking point for me with the iPhone as an iPod. Now, the iPod Classic at 160GB for $349 will finally alleviate these concerns handily. (My personal iTunes library itself is at 105GB.) So the "leap" to 16GB without the phone features isn't quite worth it to me--especially since I already have an iPhone. (Early morning confusion as to which one to grab would surely ensue.) But, as flash memory drops in price and increases in availability and capacity I'm sure I'll be migrating to the third or fourth generation iPod Touch, or iPhone, or whatever they'll call it at that point.

What a day! I know I'm headed down to the Apple store over lunch!