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Absolutely. Thats why everyone complains about how an iPhone is priced at nearly 200% of its cost.
by pointlessdebate 13y ago
Absolutely. Thats why everyone complains about how an iPhone is priced at nearly 200% of its cost.
- MartinCron 13y agoPeople complain, but they still buy them.
- shmerl 13y agoWhich is not a reason to consider these practices valid (overcharging and DRM).
- pointlessdebate 13y agoNot a defence of DRM or overcharging, and more of a statement on how pricing works in real-life. Very few people have the time and knowledge to do a supply chain or BOM analysis before they buy anything. Hence, there is little incentive for companies to price products based on cost. Cost is a factor only when analyzing profits. Hence, cost is usually whatever the market is willing to pay. Saying it is unethical or wrong does not change reality.
- shmerl 13y agoThat's why stronger competition usually makes it more fair, since competitors can lower prices while still being profitable. Overcharging is usually not an indication of "willingness to pay", but an indication that the market in unhealthy (no competition, monopoly and so on).
- pointlessdebate 13y agoAgree with you. In general, overcharging does mean the market is not fair. However, even in the presence of competition, cost is not the major factor in pricing :). Competition may drive prices down but does not eliminate greed. eg: In India (where I live), mobile services cost a fraction of what it typically costs in US/Canada. Even here, texts are priced at 5x what it costs the operator :(.