Translation of Steve Jobs’s message to customers who bought an Apple iPhone for $599 last Wednesday morning and discovered that by the time they got it home Apple had slashed the price by $200.

That’s technology. If they bought it this morning, they should go back to where they bought it and talk to them. If they bought it a month ago, well, that’s what happens in technology.

Later: There’s been such a hoo-hah that Jobs has posted an Open Letter to iPhone users on the Apple site saying that

we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T, and who is not receiving a rebate or any other consideration, a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store. Details are still being worked out and will be posted on Apple’s website next week. Stay tuned.

Later still: Bob Cringely has an interesting take on it all:

This week’s iPhone pricing story, in which Apple punished its most loyal users by dropping the price of an 8-gig iPhone from $599 to $399 less than three months after the product’s introduction, is classic Steve Jobs. It wasn’t an accident. It wasn’t a thoughtless mistake. It was a calculated and tightly scripted exercise in marketing and ego gratification. In the mind of Steve Jobs the entire incident had no downside, none at all, which is yet another reason why he is not like you or me.

Let’s deconstruct the incident. Apple announced a variety of new and kinda-new iPods dominated by the iPod Touch (iPhone minus the phone) and an iPod Nano with video (great for watching miniseries). At the very end of the presentation, Jobs announced the iPhone price cut. Why did he wait until the very end? Because he knew the news would be disruptive and might have obscured his presentation of the new products. He KNEW there was going to be controversy. So much for the “Steve is simply out of touch with the world” theory.

So why did he do it? Why did he cut the price? I have no inside information here, but it seems pretty obvious to me: Apple introduced the iPhone at $599 to milk the early adopters and somewhat limit demand then dropped the price to $399 (the REAL price) to stimulate demand now that the product is a critical success and relatively bug-free. At least 500,000 iPhones went out at the old price, which means Apple made $100 million in extra profit.

Had nobody complained, Apple would have left it at that. But Jobs expected complaints and had an answer waiting — the $100 Apple store credit. This was no knee-jerk reaction, either. It was already there just waiting if needed. Apple keeps an undeserved $50 million and customers get $50 million back. Or do they? Some customers will never use their store credit. Those who do use it will nearly all buy something that costs more than $100. And, most importantly, those who bought their iPhones at an AT&T store will have to make what might be their first of many visits to an Apple Store. That is alone worth the $50 per customer this escapade will eventually cost Apple, taking into account unused credits and Apple Store wholesale costs.

So Apple still comes out $75 million ahead, which is important to Steve Jobs.

Michael has posted some interesting thoughts about the iMovie controversy. His view is that the new iMovie is a better fit with the rest of the iLife package. The old iMovie HD, he argues, is really a cut-down variation on professional editing software.

iMovie ‘08 is clearly not as flexible as iMovie HD was if you want total control over your movie, or more special effects and so on, but in return you get something that I think is much more accessible for non technical people to use. People who want to just take a few camcorder clips and put them together, cut out a few duff bits, and add some sounds and titles. iMovie 08 makes that so much easier, and that to me is what Apple’s iLife was meant to be about. iMovie HD was too complicated for that, iMovie 08 fills that gap.

Michael thinks that the actual product spectrum looks like this:

iMovie 08 — iMovie HD — Final Cut Express — Final Cut Pro

On reflection, I think he’s right.

Hard on the heels of the discovery of what Apple has done to iMovie comes another interesting example of a company losing touch with its most devoted customers. While installing software updates on one of our machines, I found that Apple wanted to install a new version of QuickTime. And then I noticed this:

Important Notice to QuickTime Pro Users

QuickTime 7 will disable the QuickTime Pro functionality in prior versions of QuickTime, such as QuickTime 5 or QuickTime 6. If you proceed with this installation, you must purchase a new QuickTime 7 Pro key to regain QuickTime Pro functionality. After installation, visit www.apple.com/quicktime to purchase a QuickTime 7 Pro key.

This is the kind of thing one used to expect from Microsoft.

Later: Quentin emailed in more reasoned tones.

When you upgrade to iLife ’08 or iWork ’08, it doesn’t overwrite the old versions. So you can still happily use a previous version of iMovie if wanted.

On the QuickTime front, installation WILL overwrite previous codecs etc. I think it’s still the case, however, that if you rename the player before installing, that old player will retain Quicktime Pro functionality though the new one doesn’t.