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Why did Apple drop the price?

I think there's no question by now what the biggest announcement yesterday was. The iPod Touch is cool, and the new CoverFlow interface will definitely make some music listeners happy this holiday, but since the end of the announcement, the biggest splash has come from the iPhone's price drop.

Why would Apple drop the price of something that was already hitting all the marks they expected to hit? The analysts have already started their breakdown, and if stock prices are any indication, it seems investors are sure Apple is worried (not about competitors obviously, but about expectations), and wants an extra boost. Of course, us Apple fans will disagree-- Apple really does want the iPhone to be "more affordable," and a lower price is icing on an already sweet cake. A lower price doesn't mean desperation-- it's Apple doing what Apple does: breaking the mold and making things better for consumers.

Except that if any other company dropped the price of a product after only a few months (ahem, Microsoft-- one of my Twitter buddies noted that no one raised hackles about the Zune's price drop), it'd be seen as a sign of big trouble. What's going on here? Is Apple just aiming to put more iPhones in consumers' hands? Are they worried about the iPhone's sales numbers? Or did they bring down the price just to make sure the iPhone was still competitive against the iPod Touch?

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