The Right Strategy for the iPhone early adopters

In this mornings readings there are two speculations on the changes in iPhone pricing. The first is from Steven Levitt (Freakanomics) in the NYT titled Should Apple Burn its Economics Textbooks? Levitt argues that the move to cut prices was right but still made some early adopters angry. Levitt argues that the best thing for the company to have done is to have offered a $200 rebate. That way everyone is equal. It cuts into Apple's profits but keeps people happy.

In the last couple of days as I was traveling I talked to several iPhone users (and one Motorola employee) and asked them about the kerfluffle. Their response (admittedly not a real sample) was about the same as mine. They bought the phone because it was something they wanted and the original price was fine at the time. One person expressed a bit of disappointment that the drop in price did not also offer generation 2 of the phone. The Motorola guy was also interesting - he said that Motorola still looks at the Apple relationship they had with some interest. (Apple's key chips were Motorola and at the same time the original iTunes phone the Rockr was a Motorola phone - the Rockr did not sell well at all.) But he was interested in whether I liked the phone - he also asked me which phone I moved from (the Razr).

Levitt's article (which is a regular feature of the Times) also offers a pointer to a blog entry by a marketing guy named Seth Godin. His solution for the grumpies is a lot more creative and would probably cost a lot less dough. In his column he seems to understand (as Levitt seems not to) that the decision to purchase a technology product like the iPhone involves both economic and status considerations. So his solutions suggest that you should reward the status. His three proposals are
•Free exclusive ringtones, commissioned from Bob Dylan and U2, only available to the people who already had a phone. (This is my favorite because it announces to your friends--every time the phone rings--that you got in early).
•Free pass to get to the head of the line next time a new hot product comes out.
•Ability to buy a specially colored iPod, or an iPod with limited edition music that no one else can buy.

I must admit I am not a very good subject for this speculation. As I commented earlier, I was not at all disappointed that Apple dropped its price. I am hopeful that they will figure out how to do a 3G phone (which would replace EDGE with a faster network) with decent battery life and a slightly higher level of memory (16gig) and soon. And at that point I will be prepared to step up to the plate again. There is a price to being an early adopter that I am willing to pay. But Godin's suggestion about getting to the front of the line plus a couple of ring tones (hopefully wider than Dylan or U2) would also be fine. In the end, depending on how the credit is finally structured, I may use it to buy the next generation of iPhone and thus get something close to what Godin proposed.