In business school, MBA students play a marketing strategy game where they launch imaginary electronics products, using phantom research & development dollars and marketing expenditures to position the products as high-end or low-end, to market to certain audiences, and then to change the price point to attract the maximum sales possible. It's a delicate game meant to emphasize how consumers value products; and how some will not purchase a product if it's too inexpensive; the low price devalues the item. It's a quest for the perfect price.

Smartphones have been on that quest, with Apple Inc. (NASDAQ: AAPL) in the lead. No company seems to more attentively strategize its price points than Apple, and the iPhone has a storied history, first launched for $599 and $499 for the 8GB and 4GB models, respectively, followed swiftly by a $200 price cut for both products. Now the new 8GB iPhone 3G is $199 if you buy it with an AT&T phone plan (and $299 for the 16GB version).

In a research note yesterday, analyst Charlie Wolf of Needham Research said he'd done the analysis and Apple could safely sell the 8GB version for $99, a price point that, with the subsidy from AT&T, would protect its margins at 42.3% (I need to see the numbers on this), and certainly convince holdouts like me (the refurb Blackberry I use was free with the contract subsidy) that the iPhone is the thing. At this price, surely the game would be a landslide in Apple's favor. The iPhone is more beautiful, more useful, and has more geeky cred than the Blackberry; at $99, I agree that the market would be won and to the iPhone conqueror would be the spoils.

You just have to love the litigious nature of today's American consumer. High-tech is especially troublesome as the product you buy today may be worth half as much within a few months, not to mention the possibility it could be obsolete. If you're an auto owner, you know this racket well. That is, many consumables are fraught with depreciation. But don't count out the country's attorney population and litigious consumer, many of whom love this kind of situation.

When Apple, Inc. (NASDAQ: AAPL) decided to cut the price of its iPhone product from $600 to $400 last month, many early adopters who, for some reason, saw fit to stand in line to pay $600 for an iPod-phone combination were taken aback by the price cut in such a short period of time. Steve Jobs, Apple's CEO, must have seen discontent coming, as he offered each $600 iPhone owner a $100 credit in an Apple store as remuneration for the price cut, and even offered a $200 refund to iPhone owners who had purchased the unit up to 14 days prior to the price reduction.

I'm still amazed he did this, since the personal technology field is constantly awash in price cuts and new model introductions. However, that generous offer was just not good enough for a New York iPhone owner. In what can only be considered a completely baseless case, consumer Dongmei Li has claimed that Apple violated price discrimination laws when it demoted the iPhone's price from $600 to $400 within two months of the product's release. Which law? What terms? Spelling out details such as? This sounds so fishy to me that salmon may be my choice for lunch today.

According to Li's lawsuit, the rapid price cut "injured early purchasers" since they could no longer resell those $600 iPhones for more than the new $400 retail price. Perhaps Li would like to sue every automaker and manufacturer who has product cycles under a year as well? I'll be waiting while twiddling my thumbs.