This really puts new meaning in to Blue Screen of Death...

Eh, the money stays in the company, so the stockholders won't see any influx of gross revenue. And it's probably a safe bet that most people will blow the $100 on iPhone accessories, which are probably anywhere from 50-80% profit anyway. So it's really not as bas as it seems. Using some VERY ghetto math here, assuming 900k iPhones sold (I heard nearly 1M have been sold, dont shoot me for bad numbers):

$100 credit for each=$90M given back....and probably 80% of those will be 60% profit margin purchases (or better, I'm being conservative here), that comes out to $36M 'lost'.

36M is a lot of scratch, but let's put it into perspective. 900k iPhone customers, and I'd say 700k of them would be pretty jacked about the $200 drop. Now maybe about 80% of those customers are happy again...560k customers have been turned from Peeved-Infuriated to Neutral-Ecstatic. And considering they raked in AT LEAST $200 in pure profit in the first place, that's just whittling away at a 180M.

And again, the gross number stays the same...it's just some numbers behind the scenes that change.

@Zoesch

True, however none of those other price drops happened TWO MONTHS after the initial product launch.

I don't know if this is still the case, but HTC at one time made the iPaqs for HP...as well as the Axims for Dell.

Woah...is that a VGA screen at true VGA resolution?!

I do sympathize with the guy a bit. There is a disproportionate amount of Apple news on Engadget. And I don't want to use the ghetto no-Apple feed either, because I still want to see the big Apple newsm but not every minor rumor...that's what TUAW is for.

You DO know you are 100% wrong, right? Any of the WMA DRM services DO NOT work on an iPod. You'll have to get unrestricted tracks from somewhere, and unrestricted tracks are not available on the all-you-can-eat subscription services. The only legal unrestricted songs (other than indie/CC licensed stuff) are from ripping CDs (even then I think the DMCA may shoot that one down), eMusic, and now Wal-Mart and a couple of others are opening up. But those are still pay-per-song, not subscription.

Furthermore, iTunes is not even a subscription service, it is a pay-per-song service. Please educate yourself before blindly defending your gadgets in the future.

iPod Newton anyone?

I agree with you in many ways...something I found that helped....avoid the 64-bit version like the plague. It has even worse compatibility and seems to have more random glitches tan 32-bit. It does perform a bit quicker when doing OS-based stuff, but overall 32-bit is a lot better...for now. I've run 5 PCs with 64-bit and have about 15 now with 32...so I am not just guessing based on my own personal install. I've been deploying them at work. (And it actually works very well...the only compatibility issues I had was one specific program which just needed a minor workaround and then updating printer drivers).

That's what the Minovsky-type ultracompact fusion reactor is for, duh...