I'm not sure the author did enough research when he says:<p><i>The popular iPod Touch media player has been revamped at three price points - $229, $299, and $399 - all costing more than the iPhone, which does everything the Touch can plus make phone calls.</i><p>Articles have stated that Apple is paid for each activation by AT&T "up to $325 per phone"[1] or "$18/month ($432 over 2 years)"[2]<p>[1] <a href="http://www.zdnet.com/blog/mobile-gadgeteer/at-t-may-pay-apple-325-for-each-iphone-3g-sold/1211" rel="nofollow">http://www.zdnet.com/blog/mobile-gadgeteer/at-t-may-pay-appl...</a><p>[2] <a href="http://news.cnet.com/8301-13579_3-9803657-37.html" rel="nofollow">http://news.cnet.com/8301-13579_3-9803657-37.html</a>
There is a great article to be written on this topic. I lost all confidence in the author however, when they repeatedly compared prices with a contract to those without.<p>For context, a new iPhone 4 without contract is $700.
><i>The popular iPod Touch media player has been revamped at three price points - $229, $299, and $399 - all costing more than the iPhone, which does everything the Touch can plus make phone calls.</i><p>Oh, bullshit. From the Apple store:<p><pre><code> Can I buy an iPhone without an AT&T contract?
No. iPhone requires a two-year AT&T wireless service contract.
</code></pre>
And how much will that two-year service contract cost you? Minimum of $40/month for voice, and $15/month for data * two years = 55*24 = $1,320.<p>Next time you're sitting at your computer and hear Microsoft's news network say they have insight into Apple, chime in: "Nope. What you have is FUD."
"You may gladly spend $229 to get a hot media player [8 GB iPod Touch], thinking it's a deal compared with the highest-priced version and not blink that you could instead buy an [16 GB] iPhone 4 at the lower price of $199 with more features."<p>The author writes off any remaining credibility with this line. $199 is the price of the iPhone with a service contract. After paying for one month of service you will have easily spent more than $229. It's hard to take any of this seriously considering this was the foundation of the argument for this first half of the article!
The comparison between the iPod Touch and the iPhone is an apples-and-oranges issue, but there's clearly some psychology involved in the price difference between the $229 8GB and $299 32GB version.<p>The $229 model seems to serve as an anchor price at the bottom end of the range that makes the $299 or $399 look more attractive. $299 sounds like a great price for a 32GB model, a "way better deal" than the 8GB one, especially because I'm sure most people compare the price of an iPod in terms of dollars-per-gigabyte rather than the incremental cost of more flash.<p>You also see it with AT&T's smartphone data plans -- you feel you're getting some kind of a deal with a $25/month 2GB plan, because the $15/month 200MB plan is utterly terrible in comparison.
Seems a little silly to compare the 9.7" iPad to the 5" Dell Streak as though they were equal devices. He mentions the Streak has a camera and a phone but fails to mention it's nearly half the size?
This article has so many lines you can pull up as ridiculous, I'm not sure where to start...<p>Apple doesn't sell 'pricing', they sell very high quality software and hardware. I've noticed the pricing has a psychological aspect to it, too - so what? Almost every business does that, surely every smart one.<p>The line about aluminum being used to 'wrap up fish' - well, it's also used in the construction of aircraft and medical equipment, because it's strong and lightweight. I guess that didn't sound like some clever, somewhat negative insight, so he left that out of the article.<p>I'm sure Apple hopes or plans for people to buy the more expensive iPad, but I find it really, really hard to believe the idea that they have created the smaller one purely as a psychological measure. Seriously.<p>They charged more for the first iPhones probably because they knew some people would pay that much, and most likely wanted to make sure they got their investment back quickly. Also, production was likely to be more expensive on the first models, in lower quantities. This guy seems to ascribe EVERYTHING to his pet theories about price psychology.<p>I really don't see how using an iPad to type a message and read a magazine is the 'same stuff we did 30 years ago', except in the most literal and narrow-minded sense.
This kind of article is the reason why Apple is doing so well. Competition does not understand why Apple works so well.<p>They see that Apple has good design so they add colours or mimic the shape of the product they try to emulate. It comes out half-assed because design gets tacked on as an after-thought.<p>They see Apple as a marketing company so they put millions in marketing a product. The products are what market themselves for the most part.<p>At the end of the day when nothing else works they decide to add stickers to every laptop to show people how superior their laptops are over the competition. "Made for Windows 7" "Intel Inside" these stickers say. But they all look ugly and on laptops they get in the way.<p>Marketer: "Sir the stickers haven't been very effective!"
CEO: "I know! Emboss them so they're more apparent!"<p>Now competitors will start saying that it's a pricing company. I love how this is going.
<i>Apple also obscures references by making its products look like nothing else, from the first iPod with a unique scroll wheel to the current iterations wrapped in gleaming aluminum. Apple seems wondrously unique, until you consider aluminum is the same material you wrap leftover fish in and then it hits you: Apple is disguising itself so you can't compare prices. Is the new $99 Apple TV box a good deal? Who knows? It looks like nothing else on the planet.</i><p>These points are kind of ridiculous. Aluminum cases aren't a Jobsian conspiracy to make it difficult to evaluate the costs and benefits of Apple products; they're because aluminum allows you to make a nicer-feeling computer case.<p>And anybody who knows about Rokus, Boxees, and all the other streaming set-top boxes can evaluate the price of the new tv.
Every sane salesman practices the so-called "pricing game"<p>This guy's comment objectively criticizes the articles apples-to-oranges comparisons between unsubsidized iPods and subsidized iPhones, as well as the reason for a 7 inch iPad: <a href="http://business.newsvine.com/_news/2010/09/06/5056176-how-apple-plays-the-pricing-game#c17234778" rel="nofollow">http://business.newsvine.com/_news/2010/09/06/5056176-how-ap...</a>
Count me in with the "Are you kidding me?" crowd. The iPhone's $199 price tag can only be compared to another device that also has a two year contract and a data subscription that increases TCO by $720.<p>My bozo bit for this Ben Kunz is permanently flipped.
Another thing that he ignores and that most of these seemingly cookie cutter "Apples more expensive" articles ignore is that Apple is a software company. They always talk a out the a hardware and then compare it with random, usually not even similarly equipped hardware to try and pretend like apple is overcharging.<p>But at least half of the value of apple products comes from software. Even of one of these iPad competitors is comparable in batery life and other qualities, these other manufacturers seem to be always way behind apple in software.<p>I don't mind buying spell products because I've never been disappointed with the value they deliver.<p>But apple doesn't make everything and when I have to buy someone elses digital camera, for instance, I'm constantly being let down by the terrible quality of their software, at least in comparison to apples way of doing things.