Jobs says sorry for iPhone price cut

SAN JOSE, Calif. — Apple CEO Steve Jobs apologized and offered $100 credits Thursday to customers who shelled out $599 for the most advanced model of the iPhone, only to have the company unexpectedly slash the price $200 in a push to boost holiday sales.

In a letter on the company's Web site, Jobs acknowledged that Apple disappointed some of its customers by cutting the price of the iPhone's 8-gigabyte model and said he has received hundreds of e-mails complaining about the price cut.

But Jobs added that "the technology road is bumpy," and there will always be people who pay top dollar for the latest electronics but get angry later when the price drops.

"This is life in the technology lane," Jobs said.

Immediately after the cuts were announced Wednesday, Jobs' tone was less conciliatory. He tartly rebuffed criticism about whether some of Apple's most die-hard fans would be miffed by the company's latest actions.

iPhone owners who bought their device that morning, he said an interview with USA Today, "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 then apparently had a change of heart. The company is making the right decision by lowering the iPhone price, he said in his letter, but needs to "do the right thing for our valued iPhone customers."

"[We] need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price," he said. "Our early customers trusted us, and we must live up to that trust with our actions in moments like these."

Jobs said Apple will hand out $100 credits for Apple's retail and online stores to iPhone customers who aren't eligible for a rebate.

And for many of the iPhone's early adopters, money is not and never was an issue. They were after the gratification of knowing they were among the first owners of something that was cool, even revolutionary.

"If they told me at the outset the iPhone would be $200 cheaper the next day, I would have thought about it for a second — and still bought it," said Andrew Brin, a 47-year-old addiction therapist in Los Angeles. "It was $600 and that was the price I was willing to pay for it."

Enjoying that period of being among the first — before the price drops and the product reaches the masses — is part of the pleasure, Brin and others say. And in much of the tech world, the usual expectation is that six months will pass before there's a major price cut and a year before a next generation of the product — usually an improved version — appears.

The looks of envy and attraction are an elixir.

"It's better than a dog, if you want to meet people," Brin said of his iPhone.

An Apple spokeswoman said the company did not have an estimate of how much the credits would cost Apple.

Under Apple's refund policy, customers who bought an iPhone within 14 days of the price cut can get a refund of the price difference if they have the original receipt.

The price cut — and the phaseout of the 4-gigabyte iPhone, which retailed for $499 — came less than 10 weeks after the two products hit the market June 29 and angered some early iPhone users, who were startled to have their prized gadgets plummet in value.

Investors were also rattled by the news, sending Apple's shares down a total of more than 6 percent over the past two days, a drop that has wiped out about $8 billion in shareholder wealth.

Some worry that Apple is cutting the price to make up for waning demand, a concern Apple countered by saying the device is now affordable to more people and has the potential to be a blowout seller this holiday season.

Apple has said it's on track to sell 1 million iPhones by the end of the current quarter.

The move has put pressure on Apple's stock, which fell more than 5 percent Wednesday and traded down on Thursday. The shares closed trading Thursday down nearly 1.3 percent at $135.01.