Apple

Apple's iPhone, left, is shown with the company's new iPod touch.

SAN FRANCISCO — One day after announcing a dramatic $200 price cut on its revolutionary iPhone just 10 weeks after it was introduced, Apple CEO Steve Jobs is cutting the legion of disgruntled iPhone owners in on the discount.

Jobs posted a letter of apology to iPhone customers on Apple's Web site Thursday afternoon, defending the company's decision to drop the product's price by one-third—but acknowledging the receipt of hundreds of angry e-mail messages.

"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," Jobs said in his letter, adding that details of the credit were still being worked out and would be available at Apple.com next week.

"This is life in the technology lane," Jobs wrote. "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."

Apple's iPhone price cut and the new lineup of iPod players introduced on Wednesday are expected to ring in healthy holiday sales, but Wall Street investors accustomed to Apple's meaty profit margins appear a bit disappointed.

Apple stock dropped $1.43, or 1.1 percent, to $135.25, in Thursday morning trading, but it was still up 2 percent over four weeks ago. On Wednesday, after the price cut was announced, shares had fallen 5 percent.

The iPhone price cut—from $599 to $399 for the 8-gigabyte iPhone—immediately set off a debate on online tech forums between early adopters, who said paying a premium price came with the territory, and those who said they felt burned. The price reduction was too much too soon, some complained.

In a discussion on The Unofficial Apple Weblog site, the views were split evenly.

Many customers took the iPhone price cut in stride, however. Ryan Roth, who bought one for $599 on Friday after months of research, chalked up his purchase to "the worst timing ever."

"I realize this is not their problem: I agreed to the original price—it's my fault," said Roth, 32, of New York, who has been thinking about getting a cell phone for four years but held out until the last week.

The steep price cut less than three months after the iPhone's launch on June 29—and the discontinuation of the 4-gigabyte iPhone, which sold for $499—were surprising from Apple, which usually keeps prices steady while adding new features. It normally discounts products only when they age.

Analysts said quick discounts are typical for the cell phone industry, however. The world's best-selling cell phone, Motorola Razr, for instance, debuted at $499 but can now be bought for less than $100.

"This is about Apple learning how to become a cell phone retailer," said Jeff Kagan, an independent telecommunications industry analyst based in Atlanta. "All of a sudden it's in the cell phone business, and everyone is trying to figure out how to measure it, and we don't know yet."

The newest iPod media players, also announced Wednesday, include a model called iPod Touch that incorporates the iPhone's touch-screen and adds the ability to wirelessly download songs directly from the new iTunes Wi-Fi Store. Also new are a version of the best-selling iPod, the Nano, that plays video and a larger capacity, 160-gigabyte version of the video iPod, newly dubbed the iPod Classic.

Apple also announced a partnership with Starbucks: Starting in October, the coffee chain's icon will light up on the Touch whenever a user nears a shop that has Wi-Fi access. Users can then download the song that's playing in that Starbucks shop or get a list of the 10 most recent songs played.

Apple executives said the revamped and expanded iPod line—in which the iPhone is recast as the top model—is the company's most robust lineup ever for the holiday season. In 2006, Apple sold a record 21 million iPod players during the holiday quarter, about 50 percent more than in the same period the year before.

Apple has now sold more than 110 million iPods since they debuted in 2001.

WFAA.com technology writer Walt Zwirko and the Associated Press contributed to this report.