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The Honolulu Advertiser
Posted on: Thursday, September 6, 2007

Apple cuts iPhone price by $200 as holidays near

By May Wong and Rachel Konrad
Associated Press

Hawaii news photo - The Honolulu Advertiser

Steve Jobs, Apple's chief executive officer, announced yesterday in San Francisco that the 8-gigabyte iPhone will now sell for $399.

PAUL SAKUMA | Associated Press

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SAN FRANCISCO — Apple Inc. slashed the price of the top iPhone by $200 yesterday to bolster holiday sales, but also angered loyal customers who paid top dollar in the gadget's first 10 weeks on the market.

The company also revamped its iPod media player lineup, introducing a model called iPod Touch that incorporates the iPhone's touch-screen and adds the ability to wirelessly download songs directly. It introduced a new version of the best-selling iPod, the Nano, that plays video.

And it announced a partnership with Starbucks: Starting in October, the coffee chain's icon will light up on the Touch whenever a user nears a shop that has Wi-Fi access. Users can then download the song that's playing in that Starbucks shop or get a list of the 10 most recent songs played.

Analysts expect Apple's new iPods will help the company clinch yet another blockbuster holiday selling season. But it will also have to deal with investors who love Apple's meaty profit margins and customers who are suffering from a bit of buyer's remorse.

The 8-gigabyte iPhone will now cost $399 — one-third cheaper than when it went on sale June 29. The 4-gigabyte iPhone, which sold for $499, will be phased out. By comparison, the iPod Touch will sell for $299 for the 8-gigabyte model and $399 for the 16-gigabyte one.

Ryan Roth, who bought an iPhone for $599 on Friday after months of research, chalked up his purchase to "the worst timing ever."

Roth, 32, of New York, said he planned to call Apple's customer support hot line to see if he could get a $200 rebate or a smaller store credit at iTunes.

"If they could do that, I'd be very happy," said Roth, who has been thinking about getting a cell phone for four years but held out until last week. "Otherwise, I realize this is not their problem: I agreed to the original price — it's my fault. It just kinda sucks."

Apple spokeswoman Natalie Kerris said Apple isn't making any such offers but noted that anyone who purchased an iPhone within the last 14 days can get a refund under Apple's return policy — if the item is unopened.