Friday
Sep212007
A Card from Gruber's Deck
Friday, September 21, 2007 at 9:15AM
John Gruber likes to call out a Jackass of the Week every now and again (and again). In that great spirit, I want to put Daniel Gross' feet to the coals for the crappy Slate link-bait he calls, "Fire Sale Nation: Why the iPhone price cut is bad news for the American economy."
Gross hits us with this gem early on:
Really? Always? Is this guy joining the ranks of people who still think that a) the iPhone sales were crawling and b) the price cut super-accelerated them?
Oh, yes. Yes he is. I bet he thought the price cut was unfair, too...
Yeah, he sure did. And by the way - the people who waited in line on the day of release to by a v1.0 device at the introductory price made chumps of themselves - but only if they feel like chumps in the first place. Returning to Gruber, I think he had the best line about the price cut early on: "...if you didn’t think the iPhone was worth $599, you shouldn’t have bought it. That’s how supply and demand works."
But here's my favorite:
An iPhone is like a condo, isn't it? I mean, a piece of consumer electronics at a luxury price point is totally comparable to a roof over your head, right? Wait...what? And he even brings automobile sales into the mix!
You see, the whole premise of the article seems to be that dramatic price cuts condition consumers to hold of on purchases. I'm not an economist or a retail analyst, but that sounds like a reasonable line for certain circumstances. I just can't help but feel like Gross is trying to grab more readers by tying his article to the hottest tech news item of the year.
I feel that including the iPhone weakens the article, however, because it's in a completely different market than homes and vehicles. Consumer buying patterns are also dramatically different for high-end electronics than they are for transportation and living space. Sure, I'll hold off on buying a house until market conditions are favorable (either for selling mine or buying a new one - or both). I bought my car brand new, but it was the previous-year's model, so it was much cheaper.
But the iPhone? Why do you think people waited in line in the first place? Everybody expected the price to come down eventually, but early adopters wanted the item as soon as possible. I suspect they'll want to be the first to own Apple's next hot item, too.
Gross finishes up with this incomprehensible statement:
Does he mean that Apple products are discounted because close to a million customers now have $100 gratis to spend in Apple stores? Surely not, since that's a temporary effect. Is he, instead, suggesting that Apple will have to introduce newer products at perceived "lower" price points? I hope not, because he'd be finishing his article with an unexplained hypothesis that makes some pretty bold assumptions. I'm sure Apple now feels compelled to introduce their next computer or iPod at a lower starting price. Not.
Why is it that journalists feel they have to associate their articles with a pop-culture item to get readers? Why can't their content stand on its own?
Gross hits us with this gem early on:
High-profile price-chopping tends to occur whenever companies freak out about the vicious combination of a slowing consumer economy and the prospect of getting stuck with big inventories of unsold goods. The tactic often works in the short term.
Really? Always? Is this guy joining the ranks of people who still think that a) the iPhone sales were crawling and b) the price cut super-accelerated them?
The hype over insanely low prices functions as a form of free advertising, and the lower prices tend to attract buyers. Apple announced on Sept. 10 that it had sold its 1 millionth iPhone.
Oh, yes. Yes he is. I bet he thought the price cut was unfair, too...
...it makes chumps out of the customers who made the product a hit—and profitable at full price—in the first place.
Yeah, he sure did. And by the way - the people who waited in line on the day of release to by a v1.0 device at the introductory price made chumps of themselves - but only if they feel like chumps in the first place. Returning to Gruber, I think he had the best line about the price cut early on: "...if you didn’t think the iPhone was worth $599, you shouldn’t have bought it. That’s how supply and demand works."
But here's my favorite:
How would you feel if you bought a condo in a Hovnanian development last month, only to find that your new neighbor paid significantly less for the exact same floor plan?
An iPhone is like a condo, isn't it? I mean, a piece of consumer electronics at a luxury price point is totally comparable to a roof over your head, right? Wait...what? And he even brings automobile sales into the mix!
You see, the whole premise of the article seems to be that dramatic price cuts condition consumers to hold of on purchases. I'm not an economist or a retail analyst, but that sounds like a reasonable line for certain circumstances. I just can't help but feel like Gross is trying to grab more readers by tying his article to the hottest tech news item of the year.
I feel that including the iPhone weakens the article, however, because it's in a completely different market than homes and vehicles. Consumer buying patterns are also dramatically different for high-end electronics than they are for transportation and living space. Sure, I'll hold off on buying a house until market conditions are favorable (either for selling mine or buying a new one - or both). I bought my car brand new, but it was the previous-year's model, so it was much cheaper.
But the iPhone? Why do you think people waited in line in the first place? Everybody expected the price to come down eventually, but early adopters wanted the item as soon as possible. I suspect they'll want to be the first to own Apple's next hot item, too.
Gross finishes up with this incomprehensible statement:
To make it up to angered iPhone customers, Apple had to offer a $100 credit to early iPhone buyers. To assuage customers angered by large discounts on a single product, in other words, Apple is effectively now discounting all its products.
Does he mean that Apple products are discounted because close to a million customers now have $100 gratis to spend in Apple stores? Surely not, since that's a temporary effect. Is he, instead, suggesting that Apple will have to introduce newer products at perceived "lower" price points? I hope not, because he'd be finishing his article with an unexplained hypothesis that makes some pretty bold assumptions. I'm sure Apple now feels compelled to introduce their next computer or iPod at a lower starting price. Not.
Why is it that journalists feel they have to associate their articles with a pop-culture item to get readers? Why can't their content stand on its own?
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