Friday's Roundup:

What's behind iPhone price cut?

This week we had several major stories in the world of Technology, I think the most intriguing one is Apple's special event and of course Apple's (AAPL) iPhone price cut, as you may have heard Apple dropped the price of the 8 gig version of the iPhone to 399$ from 599$. and after Wednesday's event you didn't have to be an expert to guess Apple loyalists and early iPhone customers who stood in the long lines for days ain't exactly going to be thrilled about this, Meanwhile Apple has received lots of criticism both from investors and Apple fan boys about cutting their hottest product price by a third nearly 2 months since its release, and Yesterday Apple CEO Steve Jobs officially apologized for pissing out his loyal fans and early iPhone adopters, and offering iPhone buyers a $100 store credit toward any Apple product.

I think that even though its really frustrating for early iPhone costumers Apple is making the right decision, now Wall st. obviously think its a sign that demand for the iPhone is low and so forth,(Apple's shares are down nearly 12$ since the announcement) I strongly disagree, I think Apple has thought this entire matter and planned it all, Jobs probably even drafted his letter months ago, the point is that Apple has to really be careful when refreshes its iPod lineup, not to cannibalize the iPhone segment and viceversa, As we reported Apple also introduced the iPod touch an which is basically an iPhone less iPhone, that shares similar features except for the phone features. So its only natural that after introducing the iPod touch at price levels of 299$ and 399$ they just had to cut iPhone's price, now keep in mind that early iPhone users paid a premium to for getting the hottest Piece of technology first.

I think that Apple really hits the sweet spot in pricing terms at 399$ for 8gig iPhone, finally its a decent competitor not only in features but also in terms of pricing, and i think they will sell tons of iPhones and iPods this Holiday season.

I give AAPL a thumbs up and advice people to buy Apple shares AAPL while its still down since Wall st. simply gets it wrong, as American Technology Research analyst Shaw Wu thinks the price cut on 8GB iPhones to $399 from $599 to be both positive and necessary.
"We have had reservations with its high price point and are glad to see Apple address this problem," he explained. "In addition, we believe this lower price is necessary to reduce cannibalization with the new iPod touch, which is essentially a thinner iPhone without the cell phone, e-mail, and Bluetooth."

Also Barron's Tech Trader Daily blog has made up an excellent list of analysts reaction to the iPod/iPhone news, you might want to check it out.

Ultimately at the end of the day I'm convinced Apple got it right, I also think the entire case had been well thought and planed by Apple including jobs apology and the rebate.

Think about it, had the iPhone been better priced from the start these 100$ or so wouldn't have been spent in an Apple store, now these iPhone users have to spend it inside Apple, and Jobs looks like the caring CEO who actually cares about his loyal users, and that's without even mentioning the tremendous value of letting iPod users experience the multitouch interface and spread it worldwide, remember one of the barriers iPhone has is hocking up with AT@T.

Once you bring multitouch iPods to the masses the road is much much clearer for people to adopt iPhones (who want to carry both a phone and an iPod touch in his pocket) making it a mainstream products and sell tons of units in the long run, not just a niche products for the tech savvy.