Quo Vadis iPhone

Implications: New product hype must match product reality Early adopters can become harsh critics A customer burned will cause lost sales

Analysis: Apple spent a lot of money to work early adopters into a "gotta have it" frenzy. In late June they grabbed iPhones hot off the production line and paid sticker prices. They had the latest hi-tech toy.

But then they had trouble activating their iPhones. They had to wait a long, too long a time for internet access. But they had bragging rights to their iPhone. Performance did not match up to the hype. A 2.5G cell phone is not so hot. A 3G phone is what the hype implied. Soon users realized what they bought was an overpriced iPod-like device with a non-state of-the-art cell phone thrown in.

Adding insult to injury, less than two months later Apple dropped prices by $200 and also dropped the 4GB iPhone. Some users became ophaned product owners. Clearly Apple sales did not match sales forecasts. Why do you think Apple dropped the price so quickly?

Apple probably punished its component suppliers with demands for lower prices. They Apple provided a new forecast for increased sales as bait to their suppliers.

Meanwhile, Apple must deal with burned customers and suppliers. What does Apple think about how future customers and valued suppliers will behave? Will Apple ever recover from angry customers and suppliers who"drank the Kool Aid" along with the hype? Apple, eat your humble pie. Get real; think about what you promise.