Apple Computing is clearly one of the most innovative companies when it comes to technology and marketing. As a result, they don't discount: the price is what the price is. Period. Until now.

The Mac and iPod have become industry-creating products from a technical viewpoint. As for marketing, who could have done it better? Mac users are a passionate breed who swear by the reliability and capability of their computers, as opposed to us PC users who swear at our computers. Creating passion in customers is the ultimate objective for marketers, one that is rarely attained.

The brilliance behind the iPod business model continues to develop. Marrying the hard product (player) with a click product (iTunes) insures Apple a continuously growing revenue stream and regular communication with the users. Brilliant.

Now comes the iPhone and a subtle dismantling of what Apple had built. Remember, Apple prices were not negotiable; Apple products were best-in-class.

Only a few weeks after loyal users had camped out - some for days - in order to be one of the first to have the phone, Apple announced a price cut of about $200. In doing this, it damaged its relationship with all three of its customers: Users, Employees and Stockholders.

Ironically, Apple lowered the price in an attempt to increase unit sales to meet some preset objective to please their stockholders. The opposite happened - their stock dropped. Like their stockholders, Apple needs to focus on profits (bottom line), not sales (top line). At the end of the day, profits are all that matter.

Users with days-old iPhones are ticked off that they could have saved money by waiting, of course. But the real damage will come with the next new product introduction from Apple. Will people line up to buy the next new cutting-edge offering from Apple? Yes, of course some will - but probably not as many. After all, every time Microsoft offers a new version of Windows, early adapters line up for the midnight store opening to be the first to have the new software - and the first to experience the bugs and incompatibilities.

Thinking about reducing your prices?

Think again:

¨     What will this price reduction mean to your customers, employees and, if you have them, investors?

¨     What impact will this price cut have on future offerings?

What could Apple have done? How could they have increased sales and value instead of lowering prices? Some ideas:

¨     Offer a reduced-feature product. People who pay less expect less and should receive less. A different skin on the product would be a good idea also.

¨     Maintain the price and bundle in additional services and features. These bundled features could be made available to all users, including those who stood in line. How about $400 worth of iTunes downloads? This would have cost Apple less than $200 and the expenses would have been spread out over time. What about a $200 coupon for the new iPod Jobs announced at the same time the price cut was announced?

In short, when you need more profits, reducing your price is the toughest way to make it happen.

Thinking about pricing? Bring in someone like me to sit down and talk through some options with you and your team. Outsiders often bring a fresh perspective to a seemingly dire situation. Call me, I can help.