Abstract

In 2007, Apple Inc. raised many eyebrows by reducing the price of its much hyped iPhone by one-third within 10 weeks of the launch. While some analysts felt that adoption of such market skimming strategies and subsequent price cuts by companies selling technological devices was nothing new, others felt that Apple’s decision to reduce the price so drastically just a few weeks after the launch was a public relations fiasco. As a section of the early adopters of iPhone voiced their resentment, Apple went into damage-control mode.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Pricing (pricing decisions, market skimming, etc)
• Public relations
• and Product adoption and diffusion

Keywords

Pricing, premium price, market skimming strategy, early adopter, public relations fiasco, iPhone, Apple, Steve Jobs, iPod, iPod Touch, telecom, AT&T, Apple Retail Stores, Nokia, Motorola