Apple Sued Over iPhone Price Cuts

An owner of Apple's iPhone filed a federal lawsuit against the digital media giant, claiming that the price reduction injured early adopters, like herself, because they cannot resell the product for the same profit as those who bought the cell phone following the price cut. Dongmei Li of Queens, N.Y., claimed the company violated price discrimination laws when it slashed the price of the 8-gigabyte iPhone by a third, from $599 to $399, within two months of the gadget's June debut.

Apple lowered the iPhone's price on Sept. 5 and also said it would stop selling the $499 4-gigabyte model. Hundreds of early customers who paid full price didn't expect a reduction so soon and complained. Apple issued an apology the next day. Under its return policy, Apple refunded the $200 difference for those who bought the phone within 14 days of the reduction. And in a move to make peace with those who purchased the higher-priced phone before that period, the company offered a $100 credit at Apple stores.

Li purchased a 4GB iPhone for $499 and alleged that owners of the 4GB model were given less favorable terms than those who bought the 8GB model at the premium price, according to the lawsuit. Apple spokeswoman Susan Lundgren declined to comment, citing the company's policy to not discuss pending litigation.

News source: Yahoo! News
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WTF, its very obvious that if you buy something when it first comes out it costs more then when its been out for a few months. Doesnt anyone know about supply and demand??????

This happens with most products anyway. Early adopters always pay top dollar and the price is eventually lowered to lure in later adopters. That's how marketing and sales works. If Apple chooses to slash their price sooner rather than later then it's within their right whether you agree with it or not. If you're a poor sap who stood in line and bought an iPhone the day it came out then you agreed to pay the original price by buying the phone. (Here's a tip: If you think the price is too high then don't buy it) Just because you're mad that other people are getting it for less now or you have buyer's remorse is no reason to throw a hissy fit, er, I mean, lawsuit.

I hope the judge awards her a box of kleenex to dry her tears as she is thrown out of court for wasting everyone's time.

Free Market Economy... when I got a bunch of morons lined up around the block at midnight waiting to buy a lame ass phone I'm going to over charge their asses too!

Funny thing about this too is that people are perfectly willing to pay $600 for a cell phone but whine and complain when Playstation 3 costs $600... the only difference is the PS3 crowd holds out forcing down the price... so should everyone that gave in and bought PS3 at premium now class action sue Sony because price reductions, bundles, and a 40GB featured reduced models are offered now? If you set a test case then the legal system is obligated to follow it for similar circumstances... feel the wraith Sony!

Budious said,
Free Market Economy... when I got a bunch of morons lined up around the block at midnight waiting to buy a lame ass phone I'm going to over charge their asses too!

Lol, Couldnt agree with you more...I guess they deserve it. If you want to be the cool guy with the cool new phone that is kinda crap, then you get what you pay for. No sense compaining about it...

Budious said,
Funny thing about this too is that people are perfectly willing to pay $600 for a cell phone but whine and complain when Playstation 3 costs $600... the only difference is the PS3 crowd holds out forcing down the price... so should everyone that gave in and bought PS3 at premium now class action sue Sony because price reductions, bundles, and a 40GB featured reduced models are offered now? If you set a test case then the legal system is obligated to follow it for similar circumstances... feel the wraith Sony!

Good point...And what legal precedent would that set. No company WOULD EVER lower prices. The PS3 fans are right in holding out for a price drop, sure they were early adopters, but they paid for the privelidge to show off to friends etc...

Apple should never have even given the $100 vouchers...

I don't agree with suing for an amount not-proportional to the damage.

But what I think is unusual in this case is that a mid-to-low price range tech-item was heavily discounted - not on sale - only 2 months after launch.

I don't think doing a test market is a bad idea. I think part of Apple's strategy was to see how many would sell at what price point. But to knock $200 off a $500 tech item 2 months after launch is virtually unheard of.

It might happen w/ a CPU but there, there is a single producer and basically one "source" material and IP. Its different with the iPhone as it uses multiple vendors to source all the items to built one. So, no single 'part' could account for the price drop as would CPU.

So, because she lost $100 on the resale of her phone, she's suing for $1 million?

Where's the logic exactly?

This happened to me. I bought an AMD Athlon 64 back when it was almost top of the line. Guess what came out the next week. The CORE 2 DUO! AMD slashed it's prices to keep up with the superior Intel chips. I was so ticked off...

guess what i was in the same boat with you maJor :(

cause back in march 2006 i built a pc (befor core 2 duo's where out) and after the core 2 duo's came out a few months later-ish i was ****ed cause there was a HUGE drop all at once in the price of the CPU's that i got which was bs cause i know you gotta expect CPU's to drop in price "gradually" over the months/years but nothing major all at once... which is what happened with the AMD Athlon 64 3500+ CPU i got in march 2006 :(

i was pretty upset... but o well, technology moves so fast you gotta expect price drops but not as much as it droped like it did all at once.... but ill take comfort in knowing i got a pretty good bang for the buck pc at the time i built it ... 1169 ish out the door for quality stuff.

p.s. no i would not sue, but i think companys should be prevented from doing major price drops within a short period of time.... cause that CPU i had held around the 200 dollar price point for quite a while and as soon as core 2 duo's came out it was about half that price just like that! instead of maybe a 20-30dollar drop and maybe a few months after that another drop and so on.

ThaCrip said,
i was pretty upset... but o well, technology moves so fast you gotta expect price drops

What do you expect? AMD CPU's were getting slaughtered by the Intel's. Seems kinda stupid to keep your prices up there and send your company bankrupt.

i hope this lady runs up a lot of court fees, and loses bad. im tired of this crap from people trying to make an easy buck just over loading the system. it makes everything else worse.

My PS3 I bought on launch day in the UK from Amazon dropped £40 within 30 days. Does that mean I can sue Amazon.

Some ppl. Its what you get for being an early adopter of technology. **** happens. Get over it.

I love america.... you can sue for anything.. I wonder if I can sue casue I was born..... I never asked to be! and now I have to keep paying to stay alive... can I sue for that also ?

I am intrigued by your ideas. I'd like to know more.

About the topic... I wouldn't sue, but what I would get out of this is, I'd remember exactly how Apple does things. If you don't like it, do not give them any more of your money. Tell a friend about your experience. That's about all I'd do, if anything.

RAID 0 said,
I am intrigued by your ideas. I'd like to know more.

About the topic... I wouldn't sue, but what I would get out of this is, I'd remember exactly how Apple does things. If you don't like it, do not give them any more of your money. Tell a friend about your experience. That's about all I'd do, if anything.

What I don't understand, where is the law suit against Sony for the price drop of the Sony Playstation 3? how about Microsoft for the price cuts of XBox 360? what about all those students who bought full priced Office 2007 before they offered a huge discount?

Its stupid, and its the US system of suing anything thats no bolted down - perish the bloody idea of personal responsibility!

kaiwai said,

What I don't understand, where is the law suit against Sony for the price drop of the Sony Playstation 3? how about Microsoft for the price cuts of XBox 360? what about all those students who bought full priced Office 2007 before they offered a huge discount?

Its stupid, and its the US system of suing anything thats no bolted down - perish the bloody idea of personal responsibility!

Well, the past few years have been very good to Apple. I'm sure they've had law suits prior to this one. Now they're in the spot light, they're gonna be subjected to many more...but yeah.. personal responsibility, it's gone right out the window. If you can't see the history of the tech industry, then you get what you have coming.

kaiwai said,

What I don't understand, where is the law suit against Sony for the price drop of the Sony Playstation 3? how about Microsoft for the price cuts of XBox 360? what about all those students who bought full priced Office 2007 before they offered a huge discount?

Its stupid, and its the US system of suing anything thats no bolted down - perish the bloody idea of personal responsibility!

I couldn't agree more!

altermind said,
I love america.... you can sue for anything.. I wonder if I can sue casue I was born..... I never asked to be! and now I have to keep paying to stay alive... can I sue for that also ?

That has to be the most awesome statement ever! Lol I like your thinking!!!!!!!!!

Regardless of what Apple's done, if you're an early adopter, you're liable to get screwed. New tech always has a good chance of: being unstable, lacking features, and being expensive. (by lacking features, I mean there's a chance that newer models may have something the very first released models don't) If you buy into the new tech right off and get screwed, I feel no sympathy for you.

As for being an eBay seller, she can go screw herself. She has no room to sue anybody simply because she's not making money.

Well, one's gotta admit that it is not usual that the prices drop in 2 months. 2 months is nothing. And apple is actually not known for dropping the prices like that, they do release upgrades on current products at the same price. It has taken the ipod classic quite a few years to come down from 300 bucks to 250, even though the newer ones crap all over the ones exactly two years ago.

Still , not a reason to sue!

that said this woman is clearly just jealous and didn't conduct enough research into which phone she would like before buying

funny thing is that she's complaning she can't resell the iphone with the same profit margin as those who bought after the price cut! Ebay seller prehaps?

Unless she's a official reseller I don't see the point of the lawsuit... :P

Another frivolous lawsuit. By the same argument....if I by a tank of gas and the price goes down a nickel I can
sue? If I buy food and the price is reduced the next day I can sue?
You early adopters of ANY technology get hosed. By paying the higher price, you make the ABILITY to reduce the
price by providing the profit for the company to recoup the price of development. It's called bleeding edge.
If you can't wait a month or more after something comes out, for the price to drop, that is YOUR problem.