An Open Letter to Steve Jobs
First off Steve, I highly doubt this was a decision made recently. My guess is that this twist was in the playbook a while back, probably pre iPhone release.
With that being said, this is brilliant marketing. By lowering the price by 1/3 or $200(really $100 since my argument is that the overcharged on purpose knowing this was coming), Apple expands the target base of potential iPhone owners. The $100 Apple Credit to early adopters takes those that were already enamored by Apple and it's products to a new level. I know several folks with an iPhone and I haven't heard a single one of them complain about the price after they purchased it. By giving these fanatical people a free $100 credit(in their mind), they will likely be sold on Apple and their products for a lot more than just the iPhone. Think of all the people that are PC users that bought iPhone at $599. The Mac Mini price point of $599 might be a good option for those in the market for a new computer with a $100 credit. Assume that this occurs and some small percentage of people buy a Mac Mini and eventually join the cult. This is the gift that keeps on giving.
Now, what was the risk in pulling this off? The only thing I see is less iPhone sales during the launch due to the inflated price. Since Apple has a cult like following, this risk is lower than it would be for the average company. In other words, some people will buy Apple products because of their brand loyalty without regard to price or competitive pricing logic. The functional quality and head turning beauty of the iPhone was bound seal the deal for another large chunk of the risk factor audience. Finally, if all else failed, Apple certainly had the media hype going and could have triggered this price reduction early on to salvage any hit that they took.
Since I'm not a marketing guy, tell me where I'm wrong...
Here is the link to the document that inspired this late night post.
An open letter to iPhone owners from Steve Jobs
Re: An Open Letter to Steve Jobs
I was wondering if the real reason it came down so dramatically was because Apple might have finally pressured AT&T into a subsidy for it..  I haven't read that anywhere, just a hunch.  Even with exclusivity, Apple can now demonstrate leverage on their own product by making the iPod Touch more desirable..  
Just random thoughts. Enjoy the day!
Re: An Open Letter to Steve Jobs
Consider all the Cingular iPhone buyers who have never stepped foot in an Apple Store now holding a $100 voucher? Take a bowl and place a jelly bean for everyone who bought an iPhone. Now remove the ones for people who bought the 4GB (no rebate for you!). Now remove those who won't bother to apply for the $100 rebate. Now remove those who get the rebate, but won't spend it because they will let it expire.
The remaining bean pile doesn't look too big now?
Those left are probably living close to an Apple Store and are frequent visitors anyway, or (woohoo!) people who will enter an Apple Store for the first time and will walk out with a $2500 pile of boxes.
The rest who spend exaclty $100 on an accessory that costs Steve $20 are not costing Steve very much at all. Steve Jobs is a genius..
http://www.pbs.org/cringely/pulpit/2007/pulpit_20070906_002891.html