Comments on: The economics of iPhone pricing

Apple did the right thing from an economic standpoint with its iPhone pricing this year, if not from a PR view of the world.

[90802984028]

Paraphrase of Levitt Blog

Is this a blog or a paraphrase of Levitt's blog? You could have just posted a link to Levitt's blog on NY Times and have been done with it. Very lame.

[UrbanBard]

Or Apple would catch flak...

Or that Apple would catch flak no matter what they did.
Remember that Apple set the price six months before a single
iPhone was sold. That is, before it really knew what the final
costs would be. The unit costs of an item that sells a million
units is substancially lower than one that sells a quarter of that.

There were dozens of stories in that six months saying that the
iPhone was over priced when it turned out to be $250 to $400
cheaper than other Smart Phones when they were unlocked and
unsubsidized. When you added in costs for the two year service
contract, the iPhone was $150 to $750 cheaper than other Smart
Phones.

I think that where Apple miscalculated was they were used to its
usual Mac Base. We rarely complain when Apple surprises us
with a price decrease or a product improvement.

That's just the way Apple acts. It's a secretive company and they
often surprise us just after we have bought something from
them. Apple expects us to be mature adults who know the game.
For example, Apple decreased its price on the 24 inch iMac
recently by three hundred dollars while improving its specs.
Were there people who had bought the month before; hence
were ineligible to return it? Sure. Did they whine publicly about
it? No.

But, the iPhone is a new product that is sold to a general
audience, not to the Mac Base. So, Apple got a bunch of
complaints.

Since Apple is branching out more into consumer electronics, it
needed to learn this lesson. I don't think it will make this
mistake again.

[Apple-addict]

Spot on

I think you hit the nail on the head with this one. It also explains all
the whining on the new iPods ranging from 'pricing' tot 'memory'. I
always wondered at such whining. I mean, if you are not happy with
it, don't buy it, right? Yet they don't suddenly flock to River or
Zune, now, do they?

[sunyanhk]

Apple is always good at marketing. Other than the good innovation of iPhone itself, iPhone has changed the landscape of telecom industry. This is a good lesson for those tech-kie in telecom industry to learn.

iPhone 2G has never been sold officially in Hong Kong . All iPhones 2G in HK are parallel imports. We all know it. The traditional product life cycle of telecom products is short (half a year?) and the price will drop when the PLC is at maturity stage. We learn it from marketing class.

iPhone changes this theory. All iPhone were from AppStore and they were locked. Also Apple only co-operate with one teleco in each country. The introductory price of 8Gb 2G unlocked iPhone in HK at early launch (version 1.11) was about HK$4,000 (parallel imports). I expected the price will follow the traditional intelligence and will drop. However, it was wrong! The price was increased nearly to HK$6,000! Why?

.... go to my blog http://hk.myblog.yahoo.com/sunyanhk/article?mid=51