Denki News

October 7, 2007

My belated reaction to the iPhone price drop

Filed under: iPod & iTunes — icruise @ 5:51 pm

I usually agree with with John Gruber over at He’s got a good head on his shoulders. But I can’t agree with his consistent defense of Apple’s recent $200 iPhone price cut.

In a recent entry, he points out what he thinks is an inconsistency with Silicon Valley Insider’s position against the iPhone price cut and their suggestion that Hannah Montana charge $200 instead of $63 for her concert tickets. The idea is that because the tickets are being scalped for prices over $200 anyway, it’s better if the money went to the people actually involved in making the music, rather than scalpers. Gruber says that this is what Apple did with the price of the iPhone. I’m not going to touch the issue of whether tickets should be more expensive (I can’t help but think there are better ways to stop scalping). But I do take issue with the idea that Apple’s pricing strategy was somehow a reasonable choice designed to keep demand from outstripping supply.

Chris Biagini has summed up my reaction to the price cut perfectly (emphasis is mine):

Those of us who’ve already bought an iPhone knew full well that they’d be hot sellers, and that Apple was making a killing off of them at $599. But this price drop shows that Apple was making more of a killing than anyone could have possibly imagined, more than anyone could have possibly thought was fair. I mean, you could probably figure out the raw cost of a pork belly, but an iPhone is a little harder to pin down. In other words, everyone assumed that the iPhone was priced more-or-less as fairly as Apple’s other products and made our valuation decisions accordingly—and we were wrong.

Assuming that the iPhone and iPod touch are now priced more-or-less as fairly as Apple’s other products, this means one of two things happened:

1. Apple gambled on the crazy-high initial price tag and lost.
2. Apple knew $599 was not sustainable if they wanted to meet their sales goals, and they knowingly screwed over the early adopters.

Either way, Apple tried to screw over customers—it’s just a matter of how many. Personally, my money is on Scenario 2. Scenario 1 would require that they underestimated the iPhone’s sales potential. Given Apple’s experience in introducing high-demand products, this seems unlikely. That leaves Scenario 2, which I think is actually a little worse. Both send a big “Thanks, suckers!” to early adopters, but Scenario 2 is just a little more evil.

Remember how Steve Jobs bent over backwards during his keynote to emphasize that it was reasonable to charge the same for the iPhone as what people paid for a smartphone + iPod? I myself defended the price, citing the long development time and other costs that Apple had to recoup, and Gruber himself said that if anything it was too low). We’d never seen anything quite like the iPhone, so it was hard to compare it to other products. We thought we were paying a fair price for the product (fair, at least, compared to Apple’s other product lines). The bottom line is that the early iPhone adopters had no idea that we were paying a $200 premium for getting the iPhone a few weeks earlier than everybody else.

However, I disagree with both Biagini and Gruber about one thing. I have a lot of trouble believing that Apple had a price drop (at least of this magnitude) planned from the start — even if they say so themselves. Not because Apple is too nice to screw over their customers, but because they are too smart not to know how people would react. I think it’s likely that iPhone sales simply weren’t as good as they had hoped. Yes, they were selling well, but not “Nintendo Wii” well, and not as well as you might have expected given the amount of excitement before the launch. Apple knew they couldn’t go into the Christmas season with sales as they were (and keep in mind that most of the hardcore Apple lovers had already bought theirs, so if anything sales were going to go down from the initial numbers). They decided that a drastic price cut was their only choice. I just can’t believe that Apple would plan to slash the price only two months after the iPhone’s release if it really had been meeting all of their sales goals. It’s never been done in their history, and it would take a remarkable tone deafness to their customer base not to know how a move like this would be received by their users and by the press. I imagine that they had the $100 store credit thing as a backup plan in case the reaction was worse than expected (and indeed, it threatened to overshadow the introduction of the new iPods.

By the way, I still love my iPhone (and the iPod nano that I paid for mostly with the $100 store credit is also nice).


July 2, 2007

iPhone blog

Filed under: iPod & iTunes — icruise @ 4:47 pm

I’ve been writing a “blog” over at the MacNN forums where I am a moderator about my impressions of the iPhone, including waiting in line, unboxing, activation, and use. Give it a look if you’re still not sick of all of the iPhone coverage on the net.

March 12, 2007

Buying songs from the Japanese iTunes Store

Filed under: iPod & iTunes, Japan — icruise @ 3:06 pm

I’m not a big fan of what is commonly called “J-Pop” but when I lived in Japan I made a conscious effort to find some Japanese artists that I did like. I rented a lot of CDs (yes you can rent CDs in Japan — a good thing, since they are close to $30 apiece) and eventually found quite a number of artists that a liked a lot. But when I moved back to the US, I was pretty much cut off. It is possible to import Japanese CDs to the US, but it’s expensive and you certainly can’t do much experimenting with new bands that you’ve never heard of before.

When the iTunes Music Store opened in Japan, I had hoped that it would allow me to buy Japanese songs, much as the US version of the iTS had helped me keep in touch with American music while I was in Japan. But unfortunately, they required you to have a credit card with a Japanese billing address just to open an account. You can listen to the 30-second previews, but not download anything — even the weekly free songs.

However, I recently found out that if you buy an iTS prepaid card from Japan, you can use it to create a Japanese iTS account without any credit card at all, allowing you to download Japanese songs. There are even places on the net (such as J-List) that sell Japanese cards for this express purpose. There are instructions on the J-List page telling how to go about creating an account with a prepaid card. You need to have the card first, though, since if you try and create an account without it, it will insist that you have a credit card. The only tricky part is that you have to have a Japanese address of some kind (even though it will likely never be used). I don’t know how strict the system is about putting in a real address, but J-List has said that you can even use their address as a dummy. However, I couldn’t find their Japanaese address on the site, though, so you might need to contact them if you want to try that.

Anyway, I can finally download Japanese music now, so I’m happy. Here are some of my favorite Japanese artists. Clicking the links will take you to their iTS page. Unfortunately, the iTS doesn’t have the greatest selection for some of them — I have 13 albums by my favorite band Spitz, and only one of them is on the iTS. They do have a couple of greatist hits albums that have some of their best stuff, though. There are also some major artists that aren’t on the iTS at all, such as Mr. Children and the Southern All Stars.
Utada Hikaru
Yamazaki Masayoshi
Inoue Yousui
Makihara Noriyuki
UA (prononuced Ooh-Ah)
Chage and Aska
Yaida Hitomi

January 10, 2007

iPhone announced!

Filed under: iPod & iTunes, Macintosh — icruise @ 6:57 am

By now you probably know that yesterday Apple announced the iPhone, a combination iPod and smartphone. I for one am still in shock, since this is the first time in a long time that Apple has delivered something that makes even the rumors and mockups look bad. Let’s take a look at it. (More after the jump.) (more…)

October 14, 2006

Stream music & photos to your Xbox 360 from your Mac

Filed under: iPod & iTunes, Macintosh, Video Games — icruise @ 12:03 pm

One nice feature of the Xbox 360 is that it can stream music and photos from your PC. However, it only works if you have Windows, and it doesn’t directly interface with your iTunes library either. Nullriver Software recently introduced Connect 360, which is a Preference Pane for Mac OS X that allows your Xbox 360 to stream music from iTunes and photos from iPhoto. Basically, it fools the Xbox 360 into thinking that your Mac is a Windows PC, and it also allows you to access your playlists and albums. It can’t handle iTS purchased music, but that’s no big surprise.

It’s a tad expensive at $20, but I tried the demo (which limits you to 100 randomly selected songs and photos) and it worked very well. It would be nice if it could stream video somehow. I believe this is possible if you have a Media Center PC. If Connect 360 can emulate a Windows PC for music and photos, maybe it can emulate a Media Center PC for video. Anyway, this is worth keeping an eye on.

September 16, 2006

What’s new in iTunes 7

Filed under: iPod & iTunes — icruise @ 3:19 pm kind of beat me to the punch with a very thorough guide to what has changed in iTunes 7, so I’ll point you there for the details, but here are some of the changes that seemed most significant to me. (More after the jump.)


September 15, 2006

Microsoft asks, “What can brown do for me?”

Filed under: iPod & iTunes — icruise @ 3:22 am

Yes, the worst kept secret in the industry has now gone public. Microsoft has finally launched their “iPod killer” device known as the Zune. So, how does Microsoft’s entry into the market compete with the iPod? (More after the jump.)

September 13, 2006

Games on the iPod

Filed under: iPod & iTunes, Video Games — icruise @ 12:20 am

In the midst of all the new hardware that was released, it would be easy to miss the fact that it is now possible to download games for your iPod from the iTunes Store. While older iPods have a few games included, they, to put it bluntly, suck. Their graphics are incredibly plain and the games themselves aren’t anything to get excited about either. The best thing you could say about them was that they were free. In fact, they were so uninspired that you would be forgiven for thinking that the iPod isn’t capable of playing decent games. But you would be wrong. (More after the jump.)


September 12, 2006

It’s Showtime! — Today’s iPod announcements

Filed under: iPod & iTunes, Macintosh — icruise @ 2:00 pm

Apple’s been busy recently. They refreshed the entire iPod line, released a new version of iTunes, added feature films to the iTunes Store (no longer called the “iTunes Music Store”) and in a very unusual move, they even announced a product that won’t be shipping until next year — a box that will stream video content to your HDTV from your computer. I’ll be talking about each announcement soon, but let’s start with the iPods. (More after the jump.) (more…)

September 8, 2006

Amazon unveils “Unbox” video download service

Filed under: iPod & iTunes — icruise @ 7:35 am

I can’t help but wonder about the timing of this announcement, since Apple is expected to announce on September 12th that they are beginning downloads of feature films from the iTunes Music Store. But in any case, Amazon has started their new “Unbox” video download service which provides downloads of TV shows for $1.99 an episode and feature films for various prices. Unfortunately the downloads are not Mac or iPod compatible.

The details of the service are still a little hard to pin down (and I think this is where the iTMS got things so right — $0.99 for a song and $1.99 for a video is easy to remember) but it seems that they offer “rentals” of some videos. You have 30 days to start watching the video, but once you start it will expire in 24 hours. I can’t tell if the prices for these are all the same, but Office Space was $2.99 to rent. They also “sell” videos, which you can presumably keep forever. Office Space is $13.45 to buy, although many other movies are significantly more expensive.

One good thing about the service that I hope Apple will also do with their movie download service is that videos are “DVD quality.” I presume this means 720 x 480 resolution, which is a lot more reasonable than tiny 320 x 240 iPod video resolution.

However, when you consider that Amazon itself offers most of the movies in its download service on DVD (with higher quality, special features, and physical media) for LESS than it’s charging to download the digital versions, you really have to wonder if these people are serious about making downloads of video work. Although it’s interesting to see a major retailer like Amazon get behind a move like this, I don’t see much to distinguish their store from other ones already around. They’re still overpriced and still don’t work with the iPod, or even with Macs.

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