Apple chief executive Steve Jobs has offered compensation to customers who have already bought an iPhone - after the firm cut $200 (£99) off the price.
Half a million phones were sold on the first weekend in the US
The company slashed the cost of the eight-gigabyte version of the phone - only available in the US - to $399.
But this earned the wrath of some customers who have paid full price since its launch two months ago.
Mr Jobs said the price cut was the right move - but offered those who had already bought it a $100 voucher.
"We want to do the right thing for our valued iPhone customers. We apologise for disappointing some of you, and we are doing our best to live up to your high expectations," Mr Jobs said.
For many the price cut slipped by unnoticed as the company unveiled a slew of new gadgets, including adding a touch-screen iPod to Apple's popular line of portable music players.
At the news conference, the firm also revealed that the four-gigabyte model of the iPhone was being dropped.