Some useful price-cutting context via the NY Times on the unexpected $200 iPhone price cut yesterday:
Motorola, for instance, introduced the ultrathin Razr phone for $499 with a
two-year service contract in early 2005. Six months later, Motorola
realized it had a hit on its hands and dropped the price to $199 in an
effort to aim at more mainstream buyers. By the end of 2005, the price
If you make that 60% price discount linear across the six months, that puts the three month percentage price reduction for Motorola’s Razr after launch at 30%, which is darn close to how much the iPhone’s price has come down. Granted, you could argue that it should be linear, that the value should stay fairly firm at first, and then fall off quickly later, but linear isn’t a bad first approximation.
[via NY Times]