Jobs’ Mea Culpa is Apple’s Victory

from GigaOM by Kevin Kelleher

Steve Jobs is sorry. He wants to give you $100 back for what you paid when you bought your iPhone too early. Provided, of course, you spend that $100 in one of his stores.

I disagree with Om on this. I get this feeling that this is exactly what Steve Jobs had planned all along? The chances are high that that extra $100 you would have saved, had the iPhone been appropriately priced to begin with, would have been spent outside an Apple (AAPL) store. Now it's staying in Apple's coffers. And Steve Jobs looks like a caring, responsive CEO who didn't mean to hurt anyone's feelings.

So Apple wins again. Forget the news stories that say Apple cut its price because sales were sluggish. On Tuesday, iSuppli, a research firm, said nearly one in 50 mobile phones sold in the U.S. was an iPhone, and that Apple was on track to sell 4.5 million iPhones this year. Today, iSuppli reiterated that view:

The iPhone outsold all competing smart-phone and feature-phone models in the United States in July on an individual basis. iSuppli�s teardown research indicates that Apple was generating a robust hardware margin at its previous pricing, and will still be profitable at the new pricing.

I suspect the money Apple makes off the iPhone will be a wash: What it loses in the new discount it will easily make up in holiday-season volume. And it will end the year with an even higher market share in handsets.

But what about Apple's stock? It fell to $132.93 this morning from a high of $145.73 Tuesday, a drop of nearly 9%. Again, the press has been quick to assert that Wall Street was disappointed with Jobs' announcements yesterday, particularly the iPhone price cut. But look at the 5-day chart, and it's clear that Apple is actually up. It was a classic case of buying the pre-announcement hype and selling on the news. It may even offer a last-chance to buy in at this level.

Over at Barron's Tech Trader Daily, there is a nice summary of analyst's preliminary reactions to the iPhone news. Bottom line, analysts were taken aback by the timing and the degree of the iPhone discount, but overall they remained "fairly enthusiastic" and few dared to lower their ratings or price targets.

Apple does not take pride in disappointing investors, and it may be that this iPhone discount, coming sooner rather than later, is a way of signaling that iPhone sales have been strong enough that it can lower prices without missing targets.