Apple in the Publicity Briar Patch

Pssst, have you heard? The iPhone is now affordable.

In case you missed that news since yesterday afternoon, Steve Jobs just made certain that you won't be able to escape it over the next 24 hours.

Most of the media reports have focused on the supposedly prickly situation that induced Jobs to apologize, and some have even praised him for handling a "crisis." Jack Flack is much more cynical, and feels the need to speculate about just how good Chairman Steve is when it comes to creating and managing hype.

Cynical Speculation #1: The early price cut was in the cards all along. Jack assumes the Apple pricing modelers had determined that the first million buyers of the iPhone would be Mac fanatics who would even trade their Cooper Minis for any new device from Cupertino. Staring at such remarkable elasticity forecasts, Apple just couldn't bring itself to leave that much money on the table. Besides, an initially astronomical price would simply further reinforce the notion that the iPhone is a breakthrough innovation.

Cynicical Speculation #2: If it wasn't already predetermined, it was an explicit back-up plan. When given much scrutiny, Jobs' story-telling logic looks thinner than a Nano, as he contends that the move was driven by the impending holiday season. Consider this bit of Q&A with the WSJ's Nick Wingfield, who asks the first obvious questions.

WSJ: Do you think you could meet your target of selling a million iPhones by the end of the month in the absence of this price cut?

Mr. Jobs: Absolutely. That's not why we're doing it. The biggest factor is that we got our own market research back and it confirmed what the third party market research had basically said. IPhone customer satisfaction is off the charts -- better than any product we've ever had. And we're thrilled with that.

Looking closely at what Jobs was actually telling us, Jack detects that Apple had run into two important pieces of data -- (a) the people who had bought iPhones loved them, (b) but those who had not bought them by now were never going to do so at the original price point.

But Apple's espoused logic gets even weaker, as Wingfield sort of asks for an explanation of the quick timing?

WSJ: I don't think you've ever cut prices this quickly after introducing a new product. Have you?

Mr. Jobs: We probably haven't. But we can't move the holidays. We're approaching the holidays so we're either going to do something or we're not.

In other words, it was out of Apple's hands. Santa must have moved the holidays forward without telling Steve! Dang.

The more likely reality is that Apple was about to hit a serious trough with the iPhone. The initial euphoria had already bagged the loyalists, and Christmas shopping is still a long way off. To avoid any perception that the iPhone was losing its mojo, Apple needed to sustain momentum, and pushed the pricing button on which its itchy index finger was already resting.

Cynical Speculation #3: Jobs' apology gift will drive profitability, not hurt it. The gift is not a $100 rebate; it's a $100 credit at Apple stores. Yes, a few souls will use the credit for less than the full amount. But let's be realistic, most of these newly thanked people are the same folks who could not resist spending $600 on a phone. With a fresh gift card prompting them into the Apple stores, how many are going to be able to resist playing with all the new toys that Jobs unveiled yesterday, and then walk out of Valhalla without shelling out at least another couple of hundred bucks of their own?

Never famous for his contrition, Jobs says he made the apology gesture because he received e-mail complaints from "several hundred" iPhone owners, a tiny portion of the total number of the early buyers. Better get those gift cards out right away!

Jack can only tip his cap to the Apple founder, who surely seeks to create a story that will significantly broaden the iPhone's consumer base, with little risk of actually alienating Apple's core loyalists, who will grumble and then realize they don't really have an acceptable alternative to which they can defect. While Jobs has a long history of managing reporters with the same delicate manner Coach K works referees, he is now proving that he is also quite comfortable toiling in the briar patch.

Is all this speculation a bit far-fetched? Maybe. But a flack can dream, can't he?