John Gruber thinks that pundits are way off when they describe the iPhone’s unsubsidized $499 price tag as too pricey. Consumers agree, and cite the price of the Apple phone as one of its major turn offs, along with Apple’s exclusive partnership with AT&T. Microsoft CEO Steve Ballmer is one of the loudest proponents of this school of thought. Here he is:
There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60 percent or 70 percent or 80 percent of them, than I would to have 2 percent or 3 percent, which is what Apple might get.
But John Gruber disagrees with consumers and most pundits, and disagree vehemently with the Microsoft CEO and says of him, “Some of these pundits and analysts are morons. Ballmer, however, is a very smart man, but what he’s saying about the iPhone is going to make him look stupid if it’s successful. He clearly doesn’t get what makes the iPhone so appealing, and his dual obsession with the price and business users is baffling.” According to Gruber, Apple is not trying to sell a phone but a smartphone, 10 million of them. iPhone’s $499 and $599 price tags, he pointed out, was the exact same price of iPod Photo (40GB and 60GB) when it first came out.
If consumers, Gruber said, are willing to spend $500 on an iPod, why not a widescreen version with telephony, WiFi and OS X with multi-touch controls?
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