Days before the first Apple iPhones went on sale, thousands of buyers lined up outside Apple stores, eager to try the new cell phone’s large, user-friendly touch screen and multimedia capabilities. Like Apple’s iconic iPod media player, instantly identifiable because of its sleek case and white ear buds, the stylish iPhone became a must-have status symbol for tech-savvy consumers across the United States. However, despite a major promotional campaign, widespread media coverage, many rave reviews, and a fast-growing customer base, the iPhone became the focus of criticism and controversy within two months of its release.

1. What was Apple’s primary pricing objective when it introduced the iPhone? What was its primary objective in cutting the product’s price just two months after introduction?
2. How much weight does Apple appear to have given to its evaluation of competitive pricing?
3. Do you agree with Apple’s decision to switch away from price skimming after the iPhone’s introduction? Defend your answer.