Steve Jobs today announced that Apple would offer a $100 store credit to early iPhone buyers stiffed by the device’s $200 price drop.

Here’s the text of Jobs’ announcement:

To all iPhone customers:

I have received hundreds of emails from iPhone customers who are upset about Apple dropping the price of iPhone by $200 two months after it went on sale. After reading every one of these emails, I have some observations and conclusions.

First, I am sure that we are making the correct decision to lower the price of the 8GB iPhone from $599 to $399, and that now is the right time to do it. iPhone is a breakthrough product, and we have the chance to ‘go for it’ this holiday season. iPhone is so far ahead of the competition, and now it will be affordable by even more customers. It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone ‘tent’. We strongly believe the $399 price will help us do just that this holiday season.

Second, being in technology for 30+ years I can attest to the fact that the technology road is bumpy. There is always change and improvement, and there is always someone who bought a product before a particular cutoff date and misses the new price or the new operating system or the new whatever. This is life in the technology lane. If you always wait for the next price cut or to buy the new improved model, you’ll never buy any technology product because there is always something better and less expensive on the horizon. The good news is that if you buy products from companies that support them well, like Apple tries to do, you will receive years of useful and satisfying service from them even as newer models are introduced.

Third, even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these.

Therefore, 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.

We want to do the right thing for our valued iPhone customers. We apologize for disappointing some of you, and we are doing our best to live up to your high expectations of Apple.

Steve Jobs
Apple CEO

The price cut was a smart move, but was handled poorly. We identified the iPhone’s pricing at its top problem when it was released, but questioned Apple’s graceless handling of the price cut yesterday.

Jobs has moved quickly to address the concerns of early adopters, which were casting a pall over yesterday’s announcements. The store credit should smooth feathers ruffled by the price cut and help direct attention back to yesterday’s releases.

Apple’s introductions yesterday were largely unsurprising, but Apple managed to deliver its strongest line of iPods ever, take iTunes store into wireless territory, and solidify its entry into the smartphone market.

While the event ended the mystery of what Apple would introduce, it raised new questions:

• Why is Apple¬†stiffing first-adopting¬†iPhone owners? Apple dropped prices on the iPhone by $200 after two months, which is pissing off a lot of the people that feel like they supported Apple by standing in line and getting an iPhone early on. Apple could minimize this issue by offering a store credit, a service credit or some other type of credit.
• When are the iPhone and iPod touch going to get Web publishing features? They are both powerful wireless devices with Web support.¬†User-generated media is one of the biggest trends on the Internet. So¬†why isn’t there a keyboard accessory for these devices, so people could use them to edit their blogs?¬†Why¬†no support for recording audio and posting it to the Web? Why no ability to browse the drive and upload photos to blogs? Why can’t we use Wi-Fi to sync podcasts both from the Web and to the Web?
• Why such a lame approach to ringtones? Apple is adding a ringtone option to iTunes, but it only works with one out of six song in the iTunes store. Third-party tools already make it easy to¬†use any audio as a ringtone on the iPhone. How about a Garageband Share As Ringtone feature?
• Why doesn’t the iPod touch have¬†Google Maps, Stocks, Notes & Weather? These apps are all nice features of the iPhone, but are missing from the touch. iPod owners need maps, too!
• How long will Apple milk the iPod shuffle? The shuffle is getting long in the tooth, $79 for a 1GB device with no screen no longer sounds so great, even if it comes in new colors like Red.

Got other questions? Let us know in the comments!

Apple and Starbucks today announced a partnership that lets customers wirelessly browse, search for, preview, buy and download music from the iTunes Wi-Fi Music Store at Starbucks onto their iPod touch, iPhone or PC or Mac running iTunes while at a participating location.

When you go to a participating Starbucks, your Apple device should automatically recognize the iTunes Wi-Fi Music Store using a high-speed Wi-Fi wireless network with no connection fee or hotspot login. Customers will be able to browse, search and freely preview millions of songs, including a new “Now Playing” service which displays the name of the song playing in the Starbucks store at that moment, then easily buy and download songs or albums directly to their device.

Prices and selection on the iTunes Wi-Fi Music Store are the same as on the regular iTunes Store. The service will make its debut at more than 600 Starbucks company-operated locations in New York and Seattle on October 2.

Apple today unveiled the iTunes Wi-Fi Music Store, giving users the ability to browse, search, preview, purchase and download songs and albums from the iTunes Music Store over a Wi-Fi network directly onto their iPod touch or iPhone.

While more useful Wi-Fi features were a key part of what we expected Apple to introduce today, the company fell short of adding capabilities like wireless podcast syncing.

With the iTunes Wi-Fi Music Store, music fans can make music purchases immediately on their iPod touch or iPhone, with no computer required. Once they connect their iPod touch or iPhone back to their PC or Mac, downloaded music will automatically sync back into their iTunes library. If users have only partially downloaded a song or album onto their iPod touch or iPhone, their computer will complete the download automatically. Prices and selection on the iTunes Wi-Fi Music Store are the same as on the regular iTunes Store.

“The iTunes Wi-Fi Music Store is really fun—you can browse, search, freely preview, buy and instantly download music right onto your iPod touch or iPhone,” said Steve Jobs, Apple’s CEO. “Innovative products like this keep iTunes at the forefront of the digital music revolution.”

Ringtones

Apple also introduced a ringtone option that will let you create custom ringtones by selecting up to a 30-second segment from over a million participating songs on iTunes and easily sync them onto their iPhone.

While is a competitive introduction, it falls short of what you can do with third-party utilities already. With iToner and Garageband, you can easily turn any audio into an iPhone ringtone. Let’s hope that Apple’s iPhone update won’t tamper with this option.

Apple today slashed pricing on the iPhone, eliminating the entry-level 4GB model, and dropping the price of the 8GB model $200 to $399.

Pricing was the number one problem we identified in our list of 5 things Apple needs to do to fix the iPhone, so we’re not surprised to see the dramatic price cut. We’d still like to see Apple fix publishing from the iPhone, intro power-user phone features, offer a bluetooth iPhone keyboard and fix developing for the iPhone.

While Apple is on track to sell its one millionth iPhone before the end of September, sales have fallen short of expectations, and pricing was the major culprit.

“The surveys are in and iPhone customer satisfaction scores are higher than we’ve ever seen for any Apple product,” said Steve Jobs, Apple’s CEO. “We’ve clearly got a breakthrough product and we want to make it affordable for even more customers as we enter this holiday season.”

The 8GB iPhone is available immediately for $399 in the US through Apple’s retail and online stores and AT&T retail stores. Apple is blowing out the 4GB iPhones for $299, and also has refurb 8GB models for $349.

The price cuts, along with the introduction of the iPod touch, are likely to quickly turn Safari from a loser in the browser war to a contender with Firefox for the number two position, after Microsoft Internet Explorer.

Apple today introduced the new iPod touch, featuring Apple’s revolutionary multi-touch user interface.

Highlights

• First introduced on iPhone, the multi-touch interface uses pioneering new software to present a different user interface for each application.
• The iPod touch also includes Wi-Fi wireless networking, the first on any iPod, and three applications that use it:
• Safari lets users wirelessly view web pages, and features Google Search or Yahoo! oneSearch;
• Apple‚Äôs YouTube application lets users wirelessly watch over 10 million free videos; and
• the new iTunes Wi-Fi Music Store lets users wirelessly browse, preview and buy songs and albums.
• The iPod touch is 8 mm thick, and is priced starting at $299.

“The iPod touch is a landmark iPod, ushering in a whole new generation of features based on its revolutionary multi-touch interface and built-in Wi-Fi wireless networking,” said Steve Jobs, Apple’s CEO. “People are going to be amazed at how thin it is and how much it does.”

We’re wondering why it doesn’t have Google Maps, Stocks, Notes & Weather.

Apple today introduced the new iPod classic, featuring 80GB or 160GB of storage that holds up to 40,000 songs or 200 hours of video.

Now in its sixth generation, the new iPod classic features an enhanced user interface featuring Cover Flow and a new all-metal enclosure. iPod classic is priced at $249 for the 80GB model and $349 for the 160GB model.

“The first iPod put 1,000 songs in your pocket—this new iPod classic can put 40,000 songs in your pocket,” said Steve Jobs, Apple’s CEO. “With a thinner, all-metal enclosure and an enhanced user interface, the iPod classic is ideal for people who want to hold everything on their iPod.”

Apple today introduced the new iPod nano, bringing video playback, an enhanced user interface featuring Cover Flow, and an new design to the company’s popular music player.

Highlights:

• The new iPod nano features a larger two-inch display with 204 pixels per inch, which lets users watch their favorite movies, TV shows and music videos in the same resolution they currently enjoy on the video iPod.
• The nano also includes three games, and additional games can be purchased from the online iTunes Store.
• The new nano delivers up to 24 hours of audio playback or five hours of video playback on a single charge.
• Squatty new design features anodized aluminum and polished stainless steel and comes in five new colors‚Äîsilver, black, blue, green and a (PRODUCT) RED special edition.

“We’ve taken the most popular music player in the world and added stunning video playback just in time for the holiday season,” said Steve Jobs, Apple’s CEO. “The iPod nano just keeps getting better and better with each new generation.”

Apple CEO Steve Jobs today announced Apple’s new lineup of iPods at an event at San Francisco’s Moscone Center.

Here are the highlights:

• The iPod shuffle appears to be on life-support. It got new colors.
• The iPod nano got a bigger screen, video capabilities and an interface update.
• Big iPods are now iPod classics, getting a new UI and hard drive capacity up to 160GB. This looks like the one to get if you’re a fan of Internet video.
• The most anticipated introduction, the iPod touch, brings the iPhone touchscreen interface to the iPod line. It’s basically an iPhone without the phone capabilities, with 8GB and 16GB capacities.
• The price on the iPhone was cut to $399, and the 4GB version was dropped. The iPhone is a success, but not the runaway success that Apple expected. Slashing the price by over 30% should bring it to a price range that’s palatable to a larger audience.
• Jobs also introduced the iTunes WiFi music store, which will allow users to browse and purchase songs via wireless connections. Purchased tracks are copied back to your computer at next sync.
• Apple’s podcast directory has hit a milestone of 125,000 podcasts, 25,000 of which are video podcasts.

While the new iPods aren’t especially surprising, Jobs introduced an extremely strong lineup that should solidify Apple’s position in the portable media player space, strengthen Apple’s venture into smart phone territory and reinforce Apple’s iTunes as the de facto standard for portable Internet media.

Steve Jobs today announced that Apple’s iTunes podcast directory had hit a milestone of 125,000 podcasts. Jobs made the announcement as part of his introduction of the fall iPod line.

“This is amazing material,” said Jobs. “It’s free, and over 25k are video podcasts.”

The announcement is a sign of the continuing strong growth of podcasting and video podcasting. While the iTunes podcast directory only includes a portion of the podcasts that are available, it is a good indicator of both the number of “show” style podcasts and the growth of podcasting in general.