Apple seeks to calm irate early iPhone buyers

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On September 5, Apple slashed the price of its $600 iPhone model to $400, saying it wanted to make the combination phone, music player and Web browser more affordable.

"Even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price," Jobs said in a letter posted on Apple's Web site.

The offer applies to people who bought iPhones at Apple or AT&T Inc stores but did not qualify for rebates or other compensation, Jobs said. AT&T is the exclusive service provider for the iPhone in the United States.

Apple has not disclosed how many iPhones it has sold since its launch in late June, but has said it sold 270,000 iPhones in the first two days and expects to sell 1 million units by the end of September.

Although Apple faces potential costs of tens of millions of dollars if most qualifying customers take the company up on the offer, that will still be a drop in the bucket compared to the $818 million in net profit it made last quarter.

"From a Wall Street perspective it will be mostly ignored, people will say, 'Hey, Apple did a goodwill gesture, they are taking good care of their customers," said Shaw Wu, an analyst with American Technology Research.

Apple has a policy to refund the difference to customers who bought a product within 14 days of a price drop.

Web sites and forums were quickly inundated with messages from irate iPhone buyers, some of whom felt that they had been punished for their early support. Jobs said he had received hundreds of e-mails from upset customers.

"Our early customers trusted us, and we must live up to that trust with our actions in moments like these," Jobs said.

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