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Prices have little to do with costs. The iphone, for example, costs $800 every year because this is the optimal price to sell a premium phone at. They build the
by thinkloop 10y ago
Prices have little to do with costs. The iphone, for example, costs $800 every year because this is the optimal price to sell a premium phone at. They build the phone to be $800, not the other way around. If costs go down in a way that the competition can't replicate, that becomes more profit for apple, not a lower price. If automation reduces costs industry-wide, companies will often/likely add more features and services (i.e. better chip in the iphone) to compete at that optimal price that they previously discovered.
- lostlogin 10y agoThis isn't quite correct - the iPhone slips down a rung after a year and becomes less expensive. Same phone lower price. Sure, the top tier gets refilled, but it isn't the same item.
- Super_Jambo 10y agoThis is because apple have carved a non-market niche out for themselves in phones as status symbols. They protect this with a big advertising budget more than really necessary for most users spent on development and when all else fails design patent lawsuit. Most markets are not this dysfunctional, if you have decent competition and new technology reduces the cost to provide the goods / service then either the price goes down or you discover you have a dysfunctional market.