Apple’s products have always been priced at a premium, and they usually can get away with it. Just a little over 2 months after they introduced the iPhone, Apple is reducing the price of the 8GB phone to just US$399. They are discontinuing the 4GB iPhone, and the remaining stocks will sell at $299.

Let’s think about that for a moment. First, any time now, we should be hearing backlash from the early adopters who paid the full price of $599 when the iPhone was first released. Second, $399 is the retail price of the unlocked Treo 680, Palm’s current best seller. Suddenly, the price differential is no longer there, and it becomes that much more difficult to justify buying a Treo 680 now.

Palm has been under pressure to deliver new products — now, it has the additional pressure to deliver new products at a low cost just to compete with Apple

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Filed under: iPhone

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