Breakpoint Book

  • Home
  • Press
  • Author
  • Science
  • Notes
  • Extras
  • Blog

Free iPhones Would Yield Rich Returns – by Jeff Stibel

November 4, 2013 By Lennon Cole

Excerpt from LinkedIn:

3010724109_40db608c9a

Last month, Apple CEO Tim Cook announced the long-anticipated iPhone 5S, and also a second product, the iPhone 5C, with a suggested retail price starting at $99. While Cook later argued that the 5C was not intended to be an entry-level device, it is clear that the less expensive device—Wal-Mart is currently selling it for $49—could enable less affluent customers to join the Apple family.

Basic economics strongly support this reasoning: demand for a product or service goes up as the price goes down. Keep prices low; encourage high demand. But oftentimes, lower prices have a paradoxical effect. In fact, lower cost is often equated with cheap, and nothing could be worse for Apple than having that association. It is one of the reasons that Steve Jobs always priced his products higher than others, even at the risk of losing market share.

The alternative to reducing prices is to eliminate them entirely. For many products and services, it’s not acceptable for the price to be low: it must be free. Apple may have been better served by giving the iPhone 5c away for free.

Read the whole article on LinkedIn, where it originally appeared.

(Photo Credit: wicker_man, Flickr)

 

Filed Under: Business Strategy, Internet, Networks Tagged: Apple, Apps, brand loyalty, economics, freemium, iPhone, network, technology

SUBSCRIBE TO BLOG

Receive notifications of new blog posts!

My Tweets
Follow us: @Breakpoint

CONNECT WITH US

  • View BreakpointBook’s profile on Facebook
  • View breakpoint’s profile on Twitter
For Press Inquiries or Speaking Engagements, Contact: Heather Herndon / HHerndon@dandb.com / 310-919-2290
  • View BreakPoint’s profile on Facebook
  • View breakpoint’s profile on Twitter

Copyright © 2023 Jeff Stibel