Mark Thoma has an interesting (and quite technical) piece examining the ramifications of Apple's iPhone price cut. I don't doubt that from an economic standpoint his analysis is correct, but if you ask me it misses the point.
Early adopters don't care about price. That's not why they stand in line for 2 days to buy the product. Economics doesn't explain that sort of behavior; psychology does. Economists might not understand that, but Steve jobs clearly does. And sure, no doubt there will be some early adopters who are mad about the $200 price cut, but my guess - one based on having actaully spent time working in the Apple store in SF - is that most of them will see the $100 store credit as free money to spend on something new. Rather than focusing on the lost $100, they'll look at it as a $100 bonus for being an early adopter.
That may not be rational, but I'm willing to bet its an accurate one.
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