iWoz stupid

I often got irritated and wrote about this weirdo in the past. It all started when I was a monkey's ass to go buy his awful autobiography that made me vommit after reading the first few pages where he kept braggin', on and on, about how he was the smartest dude in the universe since Adam and Eve. He's now left out of Apple's current fame in the world of tech lovers and he won't miss an opportunity to pass an 'exclusive' interview to some pathetic reporter who looks to make a buck with some cheap sensation news. The latest: an article in some sort of trade magazine I never heard before, taking the piss again on his ex-comrades for the 100 dollar store credit early iPhone adopters received, following iPhone's recent 200 dollar commercial price drop. He goes:

"If I bought it and gave it as a gift they get the discount. Why don't you just take my receipt and give me the money back? And of course it always comes back to Apple Store credit. So instead of getting $100 back you are getting $50 back sort of. It is very optimal to the company. I feel badly about the situation for everyone. I don't think Apple should have even done it. Maybe a very much more gradual price reduction, $50 at first or find ways to bundle it into a savings on your account."

There's more of that garbage widow-moaning but let me just comment on the above.

Above all, and let's get this out of the way, in a free world suppliers have the god-given right to change their prices anytime and for as much their heart desires. Apple dropped them on the iPhone... great for those prospective buyers; however, all early adopter pussies who were showing off their new iTouch-dildos to friends and enemies got real crossed. We got penalized, they cried, for being loyal! Bullshit! I 'll give you another example. Leica brought out recently a new top of the line digital camera that it priced north of a cool 5K USD, body alone. Recently they announced they will raise (!) their price. I haven't heard anyone complain... especially not those dudes who were standing in line to pay good money for the first pieces that hit the stores.

Anyway, following an irrational public outcry, Jobs gave back 100 bucks in Apple store credit to those early moron show-offs. Master iShow-off Woz bought 20 phones but he didn't bother to go claim his 2K yet. Instead he chooses to make multiples of that sum by giving cheap back-stubbing interviews to tabloid reporters. It's exactly here that Woz resorts into Alan Greenspan-like financial math. He says... 100 bucks in store credit cost actually 50 bucks to Apple... Where is the logic?

About the time the iPhone was launched, some moron analyst opened up a device and broke it into its parts. He found that the total production cost to Apple in third party components was about 50 percent of an iPhone's retail price. So the conclusion was that Apple made 50% margin on each iPhone sold. Of course, no marketing and distribution costs were taken into account here, not even the two to three year R&D cost they had. If they end up selling tens of millions pieces of course, the initial development cost will eventually be trivialized (not counting though fresh new iPhone versions R&D expenditure). In other words, Apple had a snowball's chance in hell to make 50% gross off those initial sales... No way!

But let's assume, for argument's sake, that Apple nevertheless maintained a gross 50 percent on each iPhone sale. Fine. Good for them and their shareholders! That means, when you paid them 500 or 600 bucks last July-August, they still maintained no more than 250 to 300 bucks as a gross margin. If they now decided to pass back 100 bucks store-credit to each early adopter, it's vis-à-vis those 250-300 margin that they were setting the size of the store-refund. Not the full fledged 500-600 bucks retail figure!

Now then, if you go use their 100 buck credit in their stores, you could buy anything with it. Like for instance, third party products that they carry. Their margin on such items is minimal... ( like the songs they sell on iTunes) so you can't assume that their offered refunds will be used to buy products carrying another 50% margin! No way! They still might, and it would just be the fair thing to do, if each buyer spent the store-credit on an equivalent margin product of theirs. On the average refund-users would probably do. If you wanted to 'punish' them though (the US is no short of certified a-holes), you'll go find the lowest margin item they carry in order to sweat each penny of your refund-bon out of their margin... that wouldn't be fair though, however, I believe Woz being capable of doing just this. In other words, make the 100 dollar credit look like a 200 dollar to Apple itself. If you are a member of Woz's club, A-hole Anonymous, just go do the same and feel good about yourself. You would do us a much bigger favor though if you went out to shut the fuck up your chairman's (iWoz) gob first.

BTW, I am seriously thinking of claiming back full refund of Woz's biography book, as well. Readers should be paid instead to read more than 10 pages of that trash.