What's Eating Jdavies?

and other marketing stories

iPhone Rebates and Credits


Thinksecret.com banners the Apple decision to give its iPhone early adapters a $100 credit after dropping the iPhone price $200 just two months from its release.

I've always thought that the price drop is premature, and could have waited at least a month even if they want to push for Christmas. In an earlier post, I figured Apple would definitely have in mind the possible negative backlash on the opinion. As it turns out, a $100 credit is on the pipeline.

The goodwill is planned to effect Apple stock price, more than basic revenues from physical goods. Apple is technically not giving away any money - even if it appears to be so! The credit is going back to the Itunes store (which effectively means Apple still gets your money back in revenues while increasing sales in other products)

From the accounting books point of view, they will merely transfer actual $$$ from iPhone revenue to Itunes store revenue when you buy using the credit, no revenue loss, save perhaps for a percentage computed for unrealized iTunes sales. Which of course can be a negligible cost-of-sales.

If the customer doesn't want to use the non-cash convertible credit to purchase Apple, it can always be sold on ebay for say, 80% the face value. Apple still gets the money back when redeemed! Instant hype over what seems to be a freebie.

Now that my friends is brilliant!

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posted by Jdavies @ 9/07/2007,


At 1/14/2008 09:27:00 PM, Blogger Svelte Rogue said...

hi jardine! love your writing, crisp, clear, and to the point. you make a loonie like me understand some marketing principles :)



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The Author


Jdavies lives in Quezon City, Philippines and has been blogging since 2002. A brand manager in a leading technology company and a freelance new media/web strategy consultant, he has refocused his blogging from personal, political & sociological observations, to marketing-related efforts and Internet trends that are relevant to his career and branding advocacies.

About This Blog

This blog is a depot of thoughts and observations on marketing trends which remain personally relevant to the Author as far as his marketing career is concerned. Having evolved from the personal blog of Jdavies, much of the earlier work contained herein are laced with personal speculation, political views, and similar advocacies. These posts are being kept for posterity's sake and for no other reason. No effort is being made to claim that the author will not contradict himself from his previous positions or that such advocacies are absolute.


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