Following the surprise announcement yesterday that Apple (NSDQ: AAPL) was slashing the price of the 8GB iPhone model by 33 percent, Steve Jobs was sanguine about the effect on customers no longer eligible for a refund. “That’s what happens in technology,” he told USA Today. Many customers were not as willing to shrug it off though and—facing some harsh criticism—Jobs now says the company will give existing iPhone customers a $100 credit.

In his open letter to iPhone customers, Jobs even used an “a” word seldom heard publicly from Cupertino: “apologize.” His stance: We’re right to lower the prices to $399 from $599 now and tech buyers will get caught in price changes but he realizes some people are very unhappy. Jobs said he read every one of the hundreds of emails from upset customers. Jobs: “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. ... We apologize for disappointing some of you, and we are doing our best to live up to your high expectations of Apple.”

Details about the credit are still a few days away but it will be an Apple store credit good online or in person.

Update: Looking over the other coverage and I think AP is way off course by saying Jobs is apologizing for the price cut. He isn’t. He’s sorry some loyal customers are upset about it and he’s applying a small amount of balm in the form of a credit that’s useful only for people planning more Apple shopping.