The "right" way to rev gadgets and pricing

In case you missed it, Apple announced they were discontinuing one iPhone and dropping the price on the second by 33%, all a mere 68 days after launch. Steve Jobs, the absolute master at generating hype, frenzy, and fandom in the consumer technology industry, dismissed this as “that’s technology.” Apparently a few people disagree (three highlights here here and here). I am one of these people.

In “the old days” all the way back in the 80s and even 90s, most consumer electronics products were cycled about once per year. Much like the auto industry, you knew full well if you bought a 100W Sony receiver with Dolby surround, the next year you’d see a 110W Sony receiver with Dolby Digital. That’s technology.

Jump ahead to today. Most consumer electronics devices still get cycled about once a year-ish, and the updates happen at different, but predictable times of the year. Flat panel displays tend to come out over the course of the Summer and early Fall, etc. Computers and mobile phones, on the other hand, are cycled fairly continuously, but again, predictable patterns exist, both in timing and pricing.

In the past two weeks, I now have two examples of companies (Apple now, Canon previously) ignoring any patterns, and simply “walk all over” their existing customers in the sake of bringing new things to market or dropping prices. These are the kinds of habits that create a chink in the armor of customer loyalty. And these chinks are exactly the moments that create opportunities for competitors.

So my advice to these manufacturers, and any others, is to think very carefully about your existing customers and how they will perceive your glorious news. If you bought an iPod nano last Xmas, you probably aren’t too upset about a new one – it’s been a while. If you bought one last month, my hunch is you are pissed. You might not do anything about it today, but the next time you are looking into buying a product, the competition might just have a chance to attract your attention.

I’m not advocating 3-month leaks on new products with pricing and tech specs revealed far too soon. I get that you have inventory that needs sell-off. But establish some patterns, we’ll learn and follow them. New iPod once a year? Great, no problem. iPhone discount just before the Holidays? Makes sense, we’re expecting it. Need to rush a new model to market to stay competitive? Excellent – set up an upgrade program for anyone who has made a purchase in the past 30 days.

The bottom line is easy: treat your existing customers with the respect and gratitude they deserve – they are the ones most responsible for delivering you your next batch of customers.

UPDATE: To the masses, Steve just did another wunderboy move with fresh kool-aid.  Still not drinkable where I come from, but something is better than nothing, right?