Pricing expert riffs on iPhone price cut: Strategic move, not desperate

Published: September 11, 2007, 1:29 pm

Tags: iphone, iphone price cut, iphonepricecut, pricing

Filed under: Google (GOOG), Apple Inc (AAPL)After the sizable price cut on the iPhone, the shares of Apple Inc. (Nasdaq: AAPL) have been jumpy. Kind of like Google Inc. (Nasdaq: GOOG), it's never easy to predict the goings-on at Apple.So is the price cut a good thing? Well, I had a chance to interview Rafi Mohammed, who is a pricing expert and the author of The Art of Pricing.His opinion on the matter?"With Apple announcing it recently sold one million iPhones, what should be clear is that last week's $200 price cut was not out of desperation. It was a very strategic move. When it released the iPhone, Apple stated its two key goals: sell one million phones before September 30 and 10 million phones before the end of 2008. One million iPhones were sold in just 74 days, but to achieve mass adoption, Apple has to cut its price to attract everyday customers. This is exactly what Apple is doing. Additionally, following its classic strategy of under promise and over deliver, an early

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