A lot of people are upset with the pricing of the newly announced iPhone 3G S. While I don’t necessarily think that this is Apple’s problem (the subsidized pricing is set by AT&T not Apple,) I am willing to be that most people will point the finger at Apple. This issue got me thinking about the ways that Apple has treated its customers over the years. As a long time (well over 20 years) fan and user of Apple computers, I have seen my fair share of Apple hubris:

• Apple // -> Macintosh “Transition” — I have fond memories of my grade school’s Apple IIe computer. I remember hearing one of the mothers at school talk about the “new” computer that Apple was going to release, and how much sturdier the disks would be. I can only imagine that she was talking about the as yet unreleased Macintosh. In my experience with Apple, the Apple II to Macintosh transition was the first example of their brazen hubris. Apple assumed that all of their customers would follow the path that they had laid out, and leave their Apple IIs behind for the (in their minds,) superior Macintosh. After the Apple II community saw the handwriting on the wall (i.e. Apple was not going to live up to the Apple II Forever! slogan,) I know a lot of users that felt slighted, and betrayed, and took the chance to switch to the IBM PC.
• Resting on the laurels of the original Macintosh — When the original Macintosh shipped in 1984, it was a decade, if not more, ahead of the IBM PC and MS DOS. Small refinements were made to the system, but at its heart, the system remained largely unchanged until the transition to OS X just a few years ago. Had Apple continued to innovate, today’s computers could look much different. The problem is that Apple knew they were so far ahead of the the competition, that they took it easy, and 10 years later, their competitors caught up with them.
• (Original) iPhone pricing — When the original iPhone was announced, the price for the 8 GB model was $599. Which is a lot of money for a cell phone. A large number of people, like myself, convinced themselves that the iPhone was worth the price, and they ponied up the cash to join the iPhone party, only be to shocked less than two months later when Apple dropped the price of the 8GB model to $399. I have long said that Apple’s problem in this case was that when they announced the iPhone at Macworld Expo 2007, they (collectively/corporately) considered it as having shipped in January 2007, even though it did not ship until June 2007. That is the only way that I can justify a $200 price drop. A price drop after 8 months is, in my opinion acceptable. To make matters worse, I think that Apple had that price drop planned all along. They had a sales threshold under which they planned to drop the price to increase sales. This may have come sooner than they expected, but I would say that the “meet them half way” solution (i.e. give every iPhone owner who paid $599 a credit for $100,) was discussed, if not completely planned before the June 30 launch.
• iPhone 3G S pricing — I don’t really think that this one is Apple’s problem, even though a number of vocal iPhone 3G owners do. It looks to me like Apple is keeping the unsubsidized pricing of the iPhone pretty consistent. The problem is that AT&T chooses the subsidized pricing, and they are also being pretty firm on the terms of their contract. Every iPhone 3G owner who is on AT&T signed a two year agreement. The difference between the original iPhone and the iPhone 3G is the subsidy, plain and simple. iPhone owners were able to upgrade a year later, without penalty, because they did not pay a subsidy the first time around. Here we are a year later, and these same users what subsidy pricing after only a year (if that much.) I think, for the most part, we are going to see AT&T holding their ground, and users will either pay the extra $200 for an early upgrade (although it would be cheaper to cancel your current iPhone, pay the $175 early termination fee, and start with a new contract,) or they’ll just wait until they are eligible.

I for one, will be waiting until December of 2010 (I just upgraded in April when my iPhone was dropped, and the screen cracked,) to upgrade. The bright side of this plan is that by that time, whatever is going to replace the iPhone 3G S should be announced and available.