From http://www.apple.com/hotnews/openiphoneletter/

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