Apple's surprise price cut of its ballyhooed iPhone worried investors that sales of the handheld might be slowing -- and angered those who had already bought the multimedia device.
Apple AAPL shares fell 5% Wednesday and 1.3% Thursday, after the company cut the price of its 8-gigabyte iPhone by $200, or 33%, to $399. The aggressive price cut came just 69 days after the product was launched. Apple also is discontinuing its 4 GB iPhone.
Apple Chief Executive Steve Jobs, in making several announcements Wednesday at a media event centered on new iPod music players, said the iPhone price cut is designed to make the product more affordable for mainstream buyers ahead of the holiday season.
But in an open letter posted Thursday afternoon on the company's Web site, Jobs apologized to early iPhone buyers who paid full price. Apple plans to offer those buyers a $100 credit good for purchases at Apple's online or retail stores. Jobs wrote that details will be posted on the Apple Web site next week.