It’s rare that a price cut provokes outrage, but Steve Jobs’s announcement of a $200 drop in the retail cost of the iPhone raised ire (“Apple Introduces iPod Touch, Wi-Fi iTunes Store, and New iPods,” 2007-09-10). Within two days, he put some salve on folks who felt they’d paid the chump tax, offering $100 Apple Store credit and promising the tools to obtain the credit would be live this week (“Apple to Offer $100 iPhone Rebate for Early Purchasers,” 2007-09-10). A page at Apple’s site is now live to carry out that task, and we hear that complaints at Apple Stores have dropped off significantly now that the details are available.
Apple wisely offers a FAQ that explains precisely who qualifies for which price rollback. In short, if you bought an iPhone on or before 21-Aug-07, still own it, and haven’t received other credits, you get the $100 store credit. If you purchased an iPhone on or after 22-Aug-07, you can obtain the full difference in price by going back to the Apple Store where you bought it with the receipt by 19-Sep-07 or calling the Apple Online Store if that’s where you purchased it. Apple doesn’t mention that if you purchased the iPhone within the last 30 days from AT&T, you may be able to get a difference in price minus a restocking fee. Nor does Apple note that some credit cards offer short-term price protection benefits.
The process of obtaining the credit is simple, although more complicated than necessary. In Step 1, you enter your phone number and the serial number on the back of the iPhone (it’s also located in the Settings application under General). If your details are valid, Apple sends you an SMS (text message) with a six-digit code you enter in Step 2 along with your phone number again (in case you return to the page later). If that code is valid, in Step 3 you’re presented with a credit in the form of a credit number and PIN, which you can copy and paste, save as a PDF, or print on paper. The credit can be used at a retail Apple Store or the Apple Online Store. Although you cannot use the credit within iTunes for music or video, according to Connie Guglielmo of Bloomberg, you can purchase iTunes gift cards. The process worked perfectly for me.
The credit apparently never expires, as there is no expiration information anywhere. That conforms with many states’ laws in which certain forms of credit or gift balances are not allowed to expire or have fees deducted from them for “maintenance.” However, you have to request your rebate by 30-Nov-07.
Now as to my point about why the process could be simpler. If you registered your iPhone, Apple already has an Apple account for you, your serial number, and your phone number. Why not simply email you a link if you qualify and tell you to pick up your credit coupon? They know who qualifies because their system checks that when you enter data.
The reason they’re not offering this simpler option is that the percentage of redemption would be higher than if they require us to go through this process. Already, Apple is paying 50 or 60 cents on the dollar to offer store credit, given their internal margins and markups. They’re keeping our loyalty, which is worth something, too. And the lower redemption rate they’ll see from employing a process with a deadline means that they will instead probably pay out closer to 20 to 30 cents on the dollar over all eligible phones, if that.