Wednesday, March 15, 2017 [Tweets] [Favorites]

The Curious State of Apple Product Pricing

Neil Cybart:

Given the preceding list, a strong case could have been made for Apple to price its new wireless headphones at $249, or even $299. The fact that Samsung priced its Gear IconX at $199 seemed to suggest a sub-$200 retail price for AirPods was unlikely. Instead, Apple sent shockwaves pulsing through the market by pricing AirPods at only $159. The action instantly removed all available oxygen from the wireless headphone space. The idea of Apple coming out with a new product that would underprice nearly every other competitor was unimaginable ten years ago.

[…]

At $269, Apple Watch Series 1 is one of lowest-priced smartwatches worth buying in the marketplace. Attractive pricing was one key factor driving record Apple Watch sales this past holiday quarter. In fact, even the Apple Watch Series 2, at $349, is one of the lowest-priced smartwatches in its class[…]

However, it seems like most Mac models are not as competitively priced right now, Apple is focusing on the high end of the tablet market, and it sounds like iPhone prices will be expanding up rather than down.

Update (2017-03-17): See also: MacRumors.

John Gruber:

AirPods are still showing a delivery estimate of “6 weeks”. Either demand remains unexpectedly strong or production remains unexpectedly difficult (or some combination of both).

3 Comments

"However, it seems like most Mac models are not as competitively priced right now, Apple is focusing on the high end of the tablet market, and it sounds like iPhone prices will be expanding up rather than down."

Exactamundo. My suspicion on the specific case of Apple headphones is that they're taking a minimal margin here in order to smooth over complaints in ditching the headphone jack in order to not disturb their cash cow iPhone. Courage.

This would have the implication that Apple may well increase margins to their "normal" level on their headphones over time, once the headphone jack transition recedes into the past.

Apple did something similar when they debuted the iPad at $500. They undercut a market that was just starting to take off around the $1000 level.

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