Tech Industry

Jobs on iPhone price cut: 'That's technology'

Falling prices are a way of life in the technology business, Apple CEO says in an interview with USA Today. So is the wrath of the early adopter.

Early adopters of the iPhone who are miffed about the $200 price cut announced Wednesday should know that's the way this industry works, according to Apple's CEO.

"That's technology," said Steve Jobs in an interview with USA Today posted Wednesday. "If they bought it this morning, they should go back to where they bought it and talk to them. If they bought it a month ago, well, that's what happens in technology," Jobs said, in response to a question about what he would say to iPhone customers who paid $599 for the 8GB model, now on sale for $399.

Little did those iPhone early adopters know they could save $200 if they waited a little over two months. CNET Networks

Anyone who's bought an HDTV in the past 18 months, or a PC in the last 15 years, knows that price drops are in fact a part of life in the tech industry. Call it Moore's Law, miniaturization or planned obsolescence, but it's been around for a while.

However, the steep drop in price of the iPhone has Apple's usually loyal early adopters fuming. Angry threads are springing up on Apple's discussion boards, and some have been deleted. Calls to Apple's customer service centers for clarification on who is eligible for a iPhone rebate are overwhelming the system, according to CNET's Declan McCullagh, who called wondering about a rebate on his iPhone purchase.

But how could anything specifically related to "technology" have accounted for the iPhone price cuts? It's not like the price of 8GBs of flash memory fell 33 percent in the last 80 days. Apple's now cranking out iPhones, Jobs said, which does help to reduce overall costs as volume discounts from suppliers take hold. But he also said that Apple now wants to be more "aggressive," which either means that Apple needed to make this pricing move to jump-start demand or that it wants to get the iPhone in front of mainstream customers, depending on your political sensibilities.

Jobs told The Wall Street Journal that Apple would have made its shipment goal of 1 million iPhones by the end of this month without the price cut, although that will be difficult to verify. And The New York Times reported that the pricing move was in the cards from the start, as part of a strategy to price the iPhone more in line with the iPod Touch, a really interesting and compelling product that is being overshadowed by the pricing flap.