Apple Sells A Million iPhones, But Woz Calls Price Cuts “An Accidental Error”

Posted Sep 10, 2007

Apple Inc. has sold a million iPhones, folks.  This is within 3 months of release date.  The Apple iPhone was officially released on June 29, 2007.  However, there are some eyebrow-raising questions about whether these sales have met expectations, particularly from Apple co-founder, Steve “Woz” Wozniak.  This is implied by his response to Apple Inc.’s cost-cutting. 

“My opinion about why they did it is that they have a large inventory and they are set up to build more than they have sold by a bit and they have to keep things moving,” stated Woz.  “It happened to every technology product with the price coming down – but you don’t expect it to be two months, you expect it to be at least a year.”

What’s my hypothesis?

My hypothesis is that Steve Jobs just became so overjoyed by the buzz going around the iPhone that he wanted to continue to impress throughout the rest of the fiscal year.  And what’s more impressive than lowering prices and introducing new product-lines at the same time?  Microsoft also announced a lower-priced Microsoft Zune shortly before the announcement implying that they are also up to something and the company is known for losing money on hardware but finding ways to make money later (example: XBox).

Yes, Woz could be right and that Apple might have an inventory surplus.  But shelf life can become expensive and the old stuff should be cleared out, but it shouldn’t be an indication of poor sales as demonstrated by the number of iPhones sold to-date.  I’m also disgruntled with Apple since that iPod Touch announcement came out of nowhere and I bought an iPod Video a month or two ago. 

If there is anything to be concerned about, it should be that the lower prices could be a sign of monopolization.  I’m wondering what Microsoft and Google has in the pipeline so that some of the eggs are taken out of Apple’s digital music hardware basket.  Any speculations on a Microsoft Phone or Google Phone?