What is Digg?31 Comments
- volcom88, on 10/10/2007, -3/+14Gahh, Iphone owners are such whiners, first you complain about the price, then you complain about the price drop, then you complain about the $100 giftcard Apple gives you for being whiners? STFU ALREADY
- spinchange, on 10/10/2007, -1/+11It's my understanding that you can purchase an actual, physical gift card with the credit...just not an electronic one. Why there's a distinction is anyone's guess.
- inactive, on 10/10/2007, -1/+8Download music for free, and spend 100$ on something else! yarr
- fuzzmeister, on 10/10/2007, -1/+7I wouldn't be complaining so much. Apple didn't have to give anyone anything, but decided to give $100 to everyone. Complaining about what that $100 can be used for is just puerile.
- D3koy, on 10/10/2007, -1/+6In my opinion you shouldn't get any money back...You waited in line, you just had to be the first kid on the block with the new toy...now that you've got the toy, little jimmy down the street got it for less. And you want money back? That's dumb, you were willing to pay the money, clearly you were happy with the price point, or you would have been like me and decided to wait until it drops a little...
- DavisCollins, on 10/10/2007, -1/+6Buried as inaccurate. I purchased a 50$ (physical) iTunes gift card with my iPhone Credit, which they sent to me in the mail within three days.
- 37prime, on 10/10/2007, -0/+4Don't even bother with Gizmodo, they are pulling Dvorak stunts on everyone.
Halo 3, Apple, iPhone, poop, etc....
Gizmodo is craving for attentions. - mwolfzorn, on 10/10/2007, -2/+54. $90 rebate.
Fixed it for you - SPECOPS, on 10/10/2007, -2/+4Spinchange - you are 100% correct. My roommate bought two $50 itunes gift cards (came in the mail in 2-3 days), and has already used them all up. If gizmoto would have read the fine-print themselves, they would have read that it cannot be used for ELECTRONIC iTUNES gift cards.
- fatbobsmith, on 10/10/2007, -1/+3I bought two $50 iTunes gift cards with my $100 rebate. Go to an Apple Store.
- fkr3, on 10/10/2007, -0/+2It's my understanding that with all of the advertising and second-hand content gizmodo and their spam network constantly regurgitate and pimp that $100 store credit is chump change.
- Bricks, on 10/10/2007, -4/+61. take giftcard
2. goto www.ebay.com
3. !!!!!!
4. $90 profit - Mojay, on 10/10/2007, -0/+2From the TOS for the iPhone credit (http://www.apple.com/iphone/storecredit/ , Scroll down) :
"Customers may not redeem their store credits: (1) at any iTunes Store in the United States or elsewhere, (2) Apple Store locations outside the United States; (3) at Apple resellers; (4) for cash; (5) to purchase Apple Gift Cards, or,iTunes Store Gift Certificates, to give iTunes Store content as gifts, or to create iTunes Store allowances; or (6) as payments on Apple accounts."
They had this stance from day one. - nightstrm, on 10/10/2007, -0/+2Buried; my $50 gift card shipped out earlier today and should be here by the end of the week.
- movieguyjon, on 04/03/2009, -1/+3Hahahahahahahaha.
It's funny watching the various boo-hoo news posts here on digg about Apple. Really, being an early adopter has always been this way in terms of technology. I see nothing new about this. Also, I don't see anything wrong with them doing this. - Wang, on 10/10/2007, -0/+2OOOOOOooooOoOoOLD news...
- totorototoro, on 10/10/2007, -0/+2Seriously, enough with the whining about getting $100 store credit for buying an iPhone early. Between this and the iPhone hackers complaining about how Apple is "disrespectin'" their hacking efforts, christ.
- Firehed, on 10/10/2007, -0/+2It doesn't work quite like that. Apple already has the money - it starts at 100% profit. How much it decreases from there depends on the margins of the product you buy. From what I hear, Apple keeps about thirty cents out of every 99c iTunes song, giving a gross margin of about 30%. Similarly, hardware is rumored to be around the 50% mark for most of what they sell (ie, an $1100 MacBook costs them about $550 in parts, but this does NOT include assembly which would further lower their net margin). Last I heard, Apple's overall net margin is around 10%, which is crazy-good - most places are lucky to be around 5-6%. Anyways, I don't know how that breaks out between hardware, software, and download sales - but logically, Apple would have a higher net margin on song sales than on a computer or even software (devs aren't cheap).
Anyways, that doesn't really matter. No matter how things break down, their margins on emailing you a code for an iTunes GC are higher than on printing a card that has an equivalent code printed on the back, and then getting that card to you. As you're allowed to buy the cards, just not electronic gift certs (emailed code), it makes little sense from an immediate financial standpoint.
More likely than not, the reasoning behind this is that in order to buy a physical gift card, you need to either go into an Apple store or on to their online store, where there's a better chance that you'll buy something else than if you were to do it all through iTunes. That chance isn't great, but it's certainly greater than zero. So examining it from a broader perspective makes it pretty damned obvious why they're doing this.
Basically, Gizmodo are being sensationalist fools with a complete lack of financial analysis skills. Clearly, they've never taken a financial accounting 101 class (which is all I've taken, and whaddya know, I've examined the situation and come to a logical conclusion that's quite obvious to anyone with a hint of business sense). - fef560, on 10/10/2007, -0/+1It's pretty obvious. A hundred dollar gift card on the ITMS is a 100 songs to you with no profit. A hundred dollar gift card to buy a hundred and fifty dollar Nano is fifty dollars profit while at the same take driving up sales (And stock.)
- Wang, on 10/10/2007, -0/+1really? no-one else has been able to....
- undetected, on 10/10/2007, -5/+6It's pretty simple. Apple has crazy markup on the items it sells on its stores. $100 in consumer dollars is, what, $30 at cost? Not so with iTunes purchases. I think it's something about $0.79 out of every $0.99 goes to the record company. That will actually cost Apple much closer to the $100 they said they're "giving back" to early adopters. They don't want that.
- apersaud, on 10/10/2007, -1/+2Apple is just being smart:
If you spend $100 at the Apple store on Apple products - most of the profit will likely go to Apple - even if its 'made for iPod' accessories.
If you spend $100 to buy music from iTunes, most of it goes to the Record Labels. (Remember that around 77 cents for every 99 cent song goes to the Record Labels.) Hence using $100 Apple rebate for music, would be like Apple giving around $77 to the Record Labels for every store credit handed out due to the iPhone (which the Record Labels don't play a factor in its manufacturing/marketing costs). - tingrin87, on 10/10/2007, -0/+1stupid apple fanboys, digging you down...
if you'd reversed that statement, you'd be in the green :) - Alegoo92, on 10/10/2007, -7/+8I hope it's a computer error or something... because as of late Apple's looking worst than Microsoft by a lot.
- yipeyipe, on 10/10/2007, -1/+2I call BS. I ordered 2 $50 cards on store.apple.com!
- Firehed, on 10/10/2007, -0/+1That's kind of how aggregating news for profit works. Centralize everyone else's content, stick up ads, and be sensationalists so they can get more traffic than other gadget blogs.
- pintomp3, on 10/10/2007, -1/+1this is why store credit sucks.
- PATSCRU, on 10/10/2007, -1/+1sell your credit and buy music at amazonmp3. It's more of a value in the long run.
- Firehed, on 10/10/2007, -2/+1Um, no. No matter what you buy, Apple will end up "losing" about $90 on these $100 gift certificates on the immediate purchase of that exact value (scroll up a bit for my explanation of why, but the short version is go read the financial summary for AAPL). If you buy hardware, that 50% cost (give or take - the exact numbers aren't that important) only is the direct hardware cost. They still have to pay someone to assemble that hardware, install the software, put it in a box, ship it over, and stand around in the store while you buy it. If they sell you songs on iTunes, their costs are much lower (bandwidth and electricity, by and large - much cheaper than people), so once you figure in a lower gross margin, it works out about the same.
But in goodwill and by bringing people into the stores to spend these gift certificates, they more than make up the cost. This $80M loss on the gift certificates will probably bring in about $250M in other sales. Two words: loss leader. - ZenMojo, on 10/10/2007, -2/+1Apple ***** costs way too much to start with (just take a glance at their desktops), so if you put a gift card toward that they're still making mad bank. But iTunes? Oh no, that's actually reasonably priced.
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