Apple’s $11 Billion iPhone Blunder Explained: It’s Intentional!


We appreciate the reporting acumen of Saul Hansell, who has done a great job covering new media and advertising for the New York Times. But we had no idea he had extra-sensory powers!

In a “Bits” blog entry this morning Saul says he understands what no one else seems to: Apple’s iPhone price cut isn’t the act of a company that isn’t meeting sales goals. Instead, he says, Steve Jobs is cutting prices because he now realises he can sell lots of iPhones this Christmas if he sells them for less. Saul explains that Jobs has realised a month into launch that if iPhones fly off the shelves at $600, they will sell even better at $400.

Alas, this reasoning has not convinced the Street. Barron’s Eric Savitz notes that Apple is down 9% since Jobs’ Wednesday presentation, knocking $11 billion off the company’s market cap. NYT, Barron’s

See Also: iPhone Refund Confirms Sales Below Plan, Analyst: iPhone Price Cut Is Good News, and Apple Snubs AT&T, Hoses Early iPhone Buyers