Why Is Apple Slashing Prices Of iPhones?

Apple launched the iPhone ,a cellular phone with computing and Wi-Fi capabilities on June 29th 2007.It was one of the most talked about and written about consumer electronics products ever.It had people camping in front of Apple stores to snap up the first phones to hit the shelves.

Ten weeks on people agree that most of the praise is justified as is most of the criticism.It does things no phone has ever done before, yet it lacks some features found in even the most simple and cheapest phones.

An average iPhone costs $499 for the model with a 4 gigabyte memory and $599 for one with an 8 gigabyte memory.It is thin and sleek and sturdy.If you think it is too expensive then you would do well to remember that the price includes a cell phone ,video,iPod,e-mail terminal,camera , web browser,Palm type organizer and an alarm clock.Of all the features built into it the cell phone is perhaps the least important part.

But the best part is its superb software.Its fast and simple to operate and you don't get lost.On the flip side you can't install new programs from anyone but Apple.The camera takes excellent photos but no video.The major problem however is that Apple is in an exclusive deal with AT&T.Their network simply isn't good enough and in fact ranks almost at the bottom.But this problem is expected to improve over time.All in all it rates as a good buy.

And here's the latest piece of good news from Apple.Clearly with an eye on holiday sales Apple cut the price of its iPhone Wednesday.The price of the $599 model was slashed to $399.The $499 ,4 gigabyte model has been discontinued.

Apple claims that it wants to widen the market for its popular phone which is considered to be simply too expensive.But one would do well to remember that this is because the cell phone part is the least important part of the gadget.

Steven P Jobs the CEO of Apple claimed that they would have met their sales target of a million phones in the US by the end of September even without a price cut.But experts are not so sure.They are quick to point out that Motorola Razr the world's best selling cell phone till now hit the market at $499 but now sells for less than $100.They say that the cell phone market is like that and steep price cuts are normal.They suspect that Apple was finding that sales are beginning to stall.

A lot of the people who bought the iPhone before the price cut was announced feel cheated now that prices have been slashed within merely 10 weeks of its launch.Apple has announced that those who bought the iPhone within the last 14 days can claim a full refund if they have not opened it.In case they have opened it they can still get a refund of the price difference.

Whatever may be the reason for the price cut it's A Merry Christmas from Apple.