Apple is to compensate customers who paid a premium for the iPhone, after early adopters protested against an unexpected price drop introduced on 5 September.

In an open letter to customers, chief executive Steve Jobs attempted to placate iPhone owners who were angry at having paid $599 for a device that now sells for $399.

"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," wrote Jobs.

"Our early customers trusted us, and we must live up to that trust with our actions in moments like these."

Jobs said that he had received hundreds of emails from customers upset that Apple had dropped the price of the device just two months after its release.

In order to make amends, Jobs said that the company will offer all current iPhone owners a $100 credit at the Apple store.

Jobs defended yesterday's move to drop the pricing on the 8GB iPhone and discontinue the 4GB model, saying that the move "benefits Apple and every iPhone user".

"IPhone is a breakthrough product, and we have the chance to 'go for it' this holiday season," he wrote.

"IPhone is so far ahead of the competition, and now it will be affordable by even more customers."

The announcement was generally well received by users on Apple's support forums.

"The masses have yelled for attention and have received fair and adequate compensation for their loyalty as early adopters and new Apple users as well as those who have been with Apple over the years," wrote a user known as 'William Rivas'.

However, a few iPhone owners did not feel that the ability to use the new device for two months longer than the masses was worth the added price.

"The $100, like everyone says, 'is a step in the right direction', but a small step only," commented iPhone user 'Fino Dupe'. "You do not practise business that way to start with (if you value your loyal fans)."