Apple's Infomercial "Get Our Best Phone for 1/2 Price"

Do you know what 1.7 out of 10 equals. The number of iPhones Apple (AAPL) has sold in 2008 (Q1) vs the goal they have set. Now news comes of drastic prices cuts. Where is that crazy English guy who does the Sunday morning infomercials? He could move a few…

Because of this, it now seams Apple has realized the obvious and will accept iPhone’s being sold perhaps even below $200 and in an effort to help carries subsidize the price cuts, will be foregoing some of the monthly revenue they receive from subscribers.

Just over a year ago, before the iPhone hit the shelves I said “a $599 phone will not gain mass acceptance no matter what is does, lower the price to $299 and you’ll have something”

Not long after the launch, Apple dropped the price of the phone to $399 and was forced to issue $100 rebates to irate folks of questionable mental functionality who waited in line for days to BUY A PHONE.

Recent news has seen Apple fall farther behind Research in Motion’s (RIMM) Blackberry in the corporate market.

If that was not bad enough, Apple lost share to both RIMM and Palm in the total market for smart phones last month. Losing share to RIMM is one things, but Palm?

Apple fans will excuse this as Job’s and co. “emptying the shelves” of the old version to get ready for the new one. Right, because Job’s MO since day one has always been about willingly falling behind the competition. A better excuse is the 3G phone is just behind schedule and someone planned poorly. Remember, we have been hearing about this coming out “any day” since January.

Why did they fall behind? A pinched consumer will not pay $400 for a phone. I can get a Blackberry Pearl for $99 and a Palm for the same. Apple fails to realize (or only now has) that they are selling a phone, not a technological revolution. When you add recent and upcoming competitive products from Verizon (VZ) and Sprint (S), you further crown a market Apple is by far the most expensive in for a strapped consumer.

Apple fan will scream “tech talk” about why the Apple offering is so superior, pretty and “cool” at the top of their lungs. Guys………..IT’S A PHONE….PERIOD. You want to get $599 for it? Stop selling iPods, them folks will have to buy it in order to listen to their music. Not really too realistic though.

Steve Jobs will hit the stage Monday and reveal the “3G” that according the Apple fans will even be able to light my grill and flip the steaks. He will also for the first time accept massive price cuts on a superior product (to the old version). If this is not an admission Job’s and Crew misjudged the market, nothing is.

Apple fans will also claim this is some sort of “master plan” from Jobs. I seem to remember when I did not want to pay $399 for a ipod, I found one for $149 with less than half the memory and one for $99 for one with almost none. At no time did I have the ability to buy a superior version for far less money. Remember, an iPhone for under $200 will be a 50% price cut.

Will Apple hit their goal now? Probably. But, it is not because of a 3G version though. It is because they will most likely finally price the phone at a price point most sane people will actually pay FOR A PHONE.

Now that is done, Apple devotees are free to yell from the roofs at me, curse, swear, threaten, and take partial sentences mix them up to try to twist what I say all in an effort to ….well…..I do not know why they are like that.

Of, course what they could just as easily say is, “when we called you a $%#&$ last year for suggesting the phone was overpriced, we were wrong and you were right”. Doubtful though….

Disclosure (“none” means no position):Sold Apple July $280 calls in January

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