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I always enjoy this whole "iSuppli estimates the cost at $X whereas Apple charges $X*3(ish)", like Apple should feel bad about saying "You want more space? Fine

I always enjoy this whole "iSuppli estimates the cost at $X whereas Apple charges $X*3(ish)", like Apple should feel bad about saying "You want more space? Fine, pay $100". You don't want to pay the extra? Don't. Get a 16Gb device, I have for both my iOS devices and I'm reasonably happy with it due to Dropbox/Box.net having a decent clients that allow me to expand my space concerns outwards. The argument that they should charge less when people are willing to pay is ridiculous, they should charge what the market will pay, which in this case is $100 to move up the storage scale. EDIT: Possibly this should be a separate comment. In the fashion world there's two well known UK clothing companies who occupy slightly overlapping markets, but with incredibly different price points. The material costs are roughly the same, stores in similar locations, staff wages the same and so on. Both have their products made in the same factory, by the same people. One charges about 2-3x for their products than the other, the other charges a 40-50% markup immediately. That's just how luxury goods economics end up working.

maxerickson 14y ago
It's at least possible that they would make more money with lower prices (but it depends on where the volume is and where it would be).
- nicholassmith 14y ago
  It's very possible they would, but the brand has been built around premium, luxury products rather than smaller margins and it's doing well for them (see the cash pile that Smaug guards).
  - maxerickson 14y ago
    My point was more that they may be charging less than the market will pay. If lower margins on the better models result in a sufficient increase in upgrade participation, they capture more of the economic surplus. It's likely that the $100 bumps are just fine, but I don't see that $50 bumps would do much to dilute their brand (especially given the total lack of visible differentiation between the models).

maxerickson 14y ago

It's at least possible that they would make more money with lower prices (but it depends on where the volume is and where it would be).

nicholassmith 14y ago
It's very possible they would, but the brand has been built around premium, luxury products rather than smaller margins and it's doing well for them (see the cash pile that Smaug guards).
- maxerickson 14y ago
  My point was more that they may be charging less than the market will pay. If lower margins on the better models result in a sufficient increase in upgrade participation, they capture more of the economic surplus. It's likely that the $100 bumps are just fine, but I don't see that $50 bumps would do much to dilute their brand (especially given the total lack of visible differentiation between the models).