Apple limits iPhone sales: two per customer, no cash | iLounge News

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Apple limits iPhone sales: two per customer, no cash

Apple has instituted a new policy regarding iPhone purchases, limiting sales to two per customer and prohibiting cash-only sales of the handset. The new policy, put in place on Thursday, aims to help discourage people from reselling the phones, and should also help reduce strains on inventory heading into the holiday shopping season. “Customer response to the iPhone has been off the charts, and limiting iPhone sales to two per customer helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift,” Apple spokeswoman Natalie Kerris said. “We’re requiring a credit or debit card for payment to discourage unauthorized resellers.” Previously, there were no cash restrictions on iPhone purchases, and sales were limited to five per customer. Last week, Apple said that it estimates as many as 250,000 iPhones have been sold “with intention to unlock.”

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Comments

1

Does Apple even realize how many MORE iPhones would be sold if it wasn’t tied to specific carriers? It seems like they dont even care….!

Posted by ahMEmon in Canada on October 29, 2007 at 12:06 PM (CDT)

2

I don’t understand why more Apple websites are up in arms calling Cupertino out for these horribly consumer unfriendly practices.

Not accepting your own gift cards? No cash? Are they serious?

I think this speaks to Jeremy’s article a few weeks back on how Apple is becoming evil, it’s really too bad.

Posted by LSC on October 29, 2007 at 1:26 PM (CDT)

3

Okay, no one on any of this websites seems to understand how stupid it is working for Apple and having to ring up many many phones for several mostly asian customers who do nothing but turn around and unlock the phones, I’m not trying to be racist or anything, but it’s the truth.  I’ve worked for Apple a year now, so I’ve lived through all the people coming into my store buying sometimes dozens of phones each all with cash.  Apple has all rights the protect their brand name, and not let the iPhone become so diluted by resellers that can potentially damage their name.  I for one am happy to do my part, in stopping these illegal resellers.  Just check out http://www.iphone-singapore.com which is a complete ripoff of apple.com

Posted by MatrixSJD on October 29, 2007 at 1:45 PM (CDT)

4

so…your job is to ring up customers, and you’re ringing up too many customers? 

You don’t seem to understand how stupid it is that you work for apple.

Posted by OnlyShawn on October 29, 2007 at 3:00 PM (CDT)

5

OnlyShawn,

No, I’m just trying to state a fact that no one seems to understand that Apple just doesn’t want to sell phones to resellers to who might ruin Apple’s name, and ever since the price drop we’d get person after person coming in buying “5 iPhones cash” and it’s utterly ridiculous.  No one would need 5 or more iPhones for personal use.  And no, it’s not stupid to work for Apple.  I happen to love my job, just sick of the people trying to take advantage of the iPhone.  All I have to say is, thank god for them only accepting credit cards for iPhones.  Besides, don’t you realize that you need a credit card to set up an iPhone?

Posted by MatrixSJD on October 29, 2007 at 3:33 PM (CDT)

6

I can understand the limiting of 2 iPhones per customer, but the credit/debit card limitation is absurd.  I am getting ready to buy one this week and was planning to use cash that I have from old gift money to purchase it instead of racking up more credit card debt.  Last time I checked, cash is still legal tender in all 50 states. 

This is like those Visa/Mastercard commercials that show cashiers frowing on a customer using cash instead of a credit card because it slows things down!  Ask any small business owner, they’d rather take cash to avoid paying a fee to the credit card companies for processing the charge.

Oh well, guess I’ll be charging my credit card for my iPhone!

Posted by Carl on October 29, 2007 at 3:44 PM (CDT)

7

iPhone-Singapore advertises unlocked iPhones for a mere $1300SGD. xc.com gives that in USD as $894.883 at the time of this posting. Yow.

Posted by Tommy B. on October 29, 2007 at 4:01 PM (CDT)

8

When did everyone get this “I deserve anything I want” mentality?

Bottom line is this, buying something is not a right, it’s a privilege. NO business has to sell you anything. Restaurants can refuse service and any business can ask you to leave. Stop your whining.

Posted by nosedive51 on October 29, 2007 at 4:03 PM (CDT)

9

yes…apple CAN limit its sales…but why would they??  they’re in the business to make money, what reason would they have for limiting sales?  MatrixSJD has said twice that resellers would somehow ‘ruin apple’s name’, with no explanation of how that would happen. 

The only reason they have to limit sales is that AT&T is leaning on them to try to capture lost revenues.  There is utterly no downside for Apple when people buy more than two iPhones.  None.

Posted by OnlyShawn on October 29, 2007 at 7:53 PM (CDT)

10

incidentally…how would one ‘take advantage’ of the iPhone?  By buying it? By using it? Are they selling these as unlocked phones? Possibly, but is that ‘taking advantage’ of it? That is a meaningless phrase.  In actuality, these people are buying the iPhone for either themselves or for someone else to use it.  What is being taken advantage of?

And, you’re saying that, once the price dropped, MORE PEOPLE are buying iPhones?  Well, that is just unfathomable, isn’t it?  Price has an effect on demand? Certainly unique.

Finally, the point is…your job, as a cashier, is to ring up customers.  I’m confused as to how you’re getting angry at ringing up customers.

Posted by OnlyShawn on October 29, 2007 at 8:30 PM (CDT)

11

Doesn’t Apple get a cut of the money AT&T gets from peoples’ monthly payment for their phone service?  If people are buying iPhones to unlock and use on different carriers then Apple won’t get this cut of subscription payments.

Still, it’s ridiculous for them to not accept cash or gift cards as payment.

Posted by Mike on October 29, 2007 at 9:09 PM (CDT)

12

OnlySwawn said:  incidentally…how would one ‘take advantage’ of the iPhone?  By buying it? By using it? Are they selling these as unlocked phones? Possibly, but is that ‘taking advantage’ of it? That is a meaningless phrase.  In actuality, these people are buying the iPhone for either themselves or for someone else to use it.  What is being taken advantage of?

It’s called market dilution.  In addition, these modified devices may not operate to Apple spec, reducing quality, preventing upgrades and support, and generally creating a situation where you paid for an Apple product but didn’t really get one.  Apple (reasonable) does not like this scenario.

Quote OnlyShawn:  And, you’re saying that, once the price dropped, MORE PEOPLE are buying iPhones?  Well, that is just unfathomable, isn’t it?  Price has an effect on demand? Certainly unique.

No, fewer people are buying more iPhones.  Apple wishes to control distribution of their own product.  See, Apple markets to end users.  They are not wholesalers to the general public.  This is not only a completely different business model, but imagine if you will all the thousands of people coming back to Apple trying to get support/warranty service for some SingaPhone.

Quote OnlyShawn:  Finally, the point is…your job, as a cashier, is to ring up customers.  I’m confused as to how you’re getting angry at ringing up customers.

I’m confused where you get off assuming that you understand what his job is.  All employees are actively agents of said organization, and are required and empowered (generally) to enforce any policy brought forth.  Ringing people up is actually the job of anyone in a retail establishment.

Posted by DSM on October 29, 2007 at 9:58 PM (CDT)

13

Forgive my ignorance, but if a bill is proven legal tender, is it legal for them to say that they won’t accept cash payments at a brick and mortar business? And does that mean that personal checks will not be accepted either?

They may be opening themselves up to potential litigation.

Posted by plantedbypiggies on October 29, 2007 at 10:15 PM (CDT)

14

I would assume that a business can accept or refuse any particular payment medium that it so desires. Refusing cash is weird as hell, but fundamentally no different from a business allowing only Mastercard/VISA and not AMEX, refusing to accept checks, etc. I don’t believe litigation against Apple can be sustained, as plantedbypiggies’ comment suggests, because Apple is doing what it regards as reasonable with respect to transacting business.

That said, it can certainly be argued that this no-cash policy is manifestly unreasonable, and is the height of corporate arrogance. It’s somewhat laughable that Apple thinks this kind of thing will actually forestall illicit aftermarket reselling of the iPhone, but more than that, it is simply disturbing that a corporation with so much professed attention to the consumer is basically telling buyers, “We don’t trust you, and your money’s no good here.”

This is not at all the proper means to the end Apple is trying to reach. I realize they are attempting to preserve the iPhone’s integrity and safeguard customer support, but turning away legal tender is an absolutely ludicrous vehicle toward that goal.

Posted by Flippy Hambone on October 30, 2007 at 10:57 AM (CDT)

15

I don’t know the situation stateside, but here in Canada, acceptance of cash is strictly voluntary.  When incidence of counterfeiting rises, business here start refusing to accept certain denominations and are quite within their rights to do so.

On the issue of why Apple is doing this, here’s an excerpt from an article I read this morning:

If one analyst’s estimate is correct, those unlocked phones are costing Apple millions of dollars. Piper Jaffrey analyst Gene Munster said that he believes Apple receives $18 per iPhone per month from AT&T Wireless, based on iPhone-related revenue Apple reported in its latest quarterly earnings, totaling more than $4.5 million in lost revenue.

Makes a lot more sense in light of that, now doesn’t it?

(full article is at http://www.itbusiness.ca/it/client/en/home/News.asp?id=45734)

Posted by WhoCares? on October 30, 2007 at 1:03 PM (CDT)

16

In regards to refusing cash and Canada: Do Canadian bills state that “This note is legal tender for all debts public and private”? U.S. bills do. I, too, am curious as to the legality of not accepting cash payments. I’ve heard of businesses requiring a credit card TO DO BUSINESS (i.e., video stores, rental car agencies, etc.), but never refusing cash in payment. I work for a store that accepts CASH ONLY, and that’s well within the store’s rights. But refusing cash? I wonder about that.

Regarding lost money: Yes, when Apple gets revenue per month from AT&T subscriptions, they are most certainly losing money from selling iPhones that become unlocked! If the above article is right, they’d be crazy NOT to act, if it means $4.5M in losses per quarter! That’s a serious chunk of change.

Regarding diluting market value: Many companies do everything within their power to maintain control over their product: how it’s sold, marketed, and priced. There is a very good reason for this. What your product sells for determines its value in the eyes of the consumer. If some online clearing house is selling your product for a penny over their cost, it essentially becomes worth a penny over cost. Not even caring about the other retailers trying to sell the same product for MSRP, this alone destroys the perceived value of the product, which ends up damaging the perception of the company producing it. I remember a while back one particular hobby company prohibited across-the-board discounting of their product in brick-and-mortar stores (periodic sales were okay) to protect the perceived value of their product. The situation grew worse, and the company ended up prohibiting any internet retailing of their product, too, because those internet stores were also offering huge discounts across-the-board. The current situation is that you can only buy their product for MSRP at approved brick-and-mortar stores, or for MSRP on the company’s own website storefront. And now they control the value of their product.

Regarding buying things: Yeah, buying things has never been any sort of right. You can spend your money how you want, but you never have any kind of right to BUY anything you want. Apple could choose to sell their phones only in the state of California. They could decide to sell only to the U.S. and no other country (they do this with their iTunes stores all the time). It’s their product; it’s their call (no pun intended).

Posted by Tommy B. on October 30, 2007 at 4:54 PM (CDT)

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