Apple's Pricing Strategy changes

[rockymtnhigh]

An interesting piece in the New York Times on Apple's pricing strategies, and how it is no longer the high price leader on all devices.

http://www.nytimes.com/2011/10/24/t...part-of-the-plan.html?_r=1&hp=&pagewanted=all

Something unexpected has happened at Apple, once known as the tech industry's high-price leader. Over the last several years it began beating rivals on price.
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Kiyoshi Ota/Bloomberg News
Apple uses its growing manufacturing scale and logistics prowess to deliver products like its iPhone 4S at aggressive prices.
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James Best Jr.
People who wanted the latest Apple smartphone, the iPhone 4S, were able to get one the day it went on sale if they were willing to wait in a line, spend at least $199 and commit to a two-year wireless service contract with a carrier.

Or they could have skipped the lines and bought one of the latest iPhone rivals from an Apple competitor, as long as they were willing to dig deeper into their wallets. For $300 and a two-year contract, gadget lovers could have picked up Motorola's Droid Bionic from Verizon Wireless, or they could bought the $230 Samsung Galaxy SII and $260 HTC Amaze 4G, both from T-Mobile, under the same terms.

 

[meStevo]

Yeah, I'm going to end up paying $299 for a Galaxy Nexus. VZW upped the prices on their LTE Droids around the time Thunderbolt or Charge were released I think.

 

[isaacmorseMI]

Yeah, I'm going to end up paying $299 for a Galaxy Nexus. VZW upped the prices on their LTE Droids around the time Thunderbolt or Charge were released I think.

The Charge was the first $299 LTE Phone, the ThunderBolt is/was $250. But you can get alot better deals than what Verizon has through places like Wirefly and Amazon Wireless.

Sent from my iPad 2 using the SatelliteGuys App

 

[meStevo]

The Charge was the first $299 LTE Phone, the ThunderBolt is/was $250. But you can get alot better deals than what Verizon has through places like Wirefly and Amazon Wireless.

Sent from my iPad 2 using the SatelliteGuys App

Only if you're adding a new line, no?

Edit: Ah, i see a little more of a discount... $250 for a Bionic at AMZ

 

[robk299]

I wonder if an LTE iPhone would have a higher price.

 

[Ilya]

The phones are heavily subsidized by both phone companies and manufacturers.
Remember, that they also make money on phone plans, apps, accessories, etc.
So, I think it's not very accurate to compare prices of the phones alone.

 

[rockymtnhigh]

The phones are heavily subsidized by both phone companies and manufacturers.
Remember, that they also make money on phone plans, apps, accessories, etc.
So, I think it's not very accurate to compare prices of the phones alone.

But I suspect Apple has a heavy hand in what price it's devices sell for on the carrier.

Sent from my iPad using SatelliteGuys

 

[John Kotches]

I don't see this as a big change in pricing strategy. Most of the entry level Dual-Core smartphones (4s is this spec) are coming in at $149 - 199 with a contract. Higher end (the 64GB consitutes higher end) are at $249-299. I guess in that there isn't another price @ 399 makes it a "change". Previous gen phones are appropriately reduced in price.

And we know Apple gets their margins in the end somehow. Can't be as profitable as they are (not a criticism) without maintaining margins.

Cheers,

 

[mike123abc]

Look at Sprint. They had to commit to selling 30 million iPhones to get the iPhone... Apple is very much in the driver's seat. Apple still gets its margins. They have the volume. Remember they are 1 (well now 3 with 3GS, 4 & 4S) phone doing their volume, not who knows how many android phones come and go in a year.