Much has been said about the recent “drama” around the iPhone price alterations. In case you are completely in the dark, Apple basically knocked $200 off the price of the iPhone, only a month or two after it was launched. This is certainly an unexpected move from Apple but something which isn’t all that unusual in the mobile phone market.

To me, it seems that Apple have found success well beyond what they anticipated in the iPhone. I’m sure they knew it would be a resounding success, but the sales figures must have been even greater than they predicted. They are now benefitting from much greater economies of scale, and are able to produce the phone at a cheaper price. Couple this with the introduction of the iPod Touch which will bring even greater economies of scale and Apple are looking at an excellent financial outlook for the life-cycle of these products.

The price drop will have come because Apple are simply in a position to do so. They’ll be producing the device cheaper than at the outset, and will have decided that it is worth the risk to reduce the price and aim for a higher market penetration with increased sales in the lead up to the Christmas period. This is an excellent business strategy, and is likely to pay off for them. I can see their market share increasing dramatically over the coming months, and no doubt Steve will be reporting as such at the next major Apple conference.

Now has never been a better time to look into buying an iPhone, and I really hope that these price reductions will spread across to Europe around the product launch. If it is introduced over here with a similarly excessive markup, we’ll need to make the difficult decision of whether to buy and be an early adopter, or wait for a similar price drop to the USA.

I’m very surprised at the decision of Apple to offer a $100 store voucher to all those who have purchased an iPhone so far, but feel that it’s a remarkably ethical move from the company. I feel that Sean Sperte summed this up well:

Consider the statement he made during the music event on Wednesday, that Apple is on track to sell their one-millionth IPhone this month. Now consider multiplying that number by 100. Let’s just say, for example, that Apple will be giving away 600,000 store credits in the amount of $100 each. That’s $60M worth of “sorry”, and plenty of “we owe you one”.

Think about that. What other company has ever come close to voluntarily giving that kind of money back to its customers? Apple truly is one of a kind.

They are indeed!