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Apple Watch Price Watch: Just Like Comics
2014-09-22 23:01:31 -0400
apple watch

The price of the Apple Watch is still a mystery. "Starting at $349" is a small part of the story here. As John Gruber mentions in his Apple Watch write-up, the high-end model is made of solid gold and could easily sell for over $5,000. This will, he points out, make for a tremendous case of Internet Outrage over something silly again.

When the prices of the steel and (especially) gold Apple Watches are announced, I expect the tech press to have the biggest collective shit-fit in the history of Apple-versus-the-standard-tech-industry shit-fits. The utilitarian mindset that asks “Why would anyone waste money on a gold watch?” isn’t going to be able to come to grips with what Apple is doing here.

Over on the Accidental Tech Podcast this week, discussion turned to this topic, noting that if they're going to go for a price range that high, why not go higher? This product could save Apple's legenday profit margin in one fell swoop. If they're aiming this watch at that kind of market, they can afford to go higher and higher.

What if Apple is doing this on purpose? What if they're seeding the high end market to make us "lower end" buyers want one so badly that we won't blink at $349 to start? It wouldn't be unprecedented, I'm sure.

Let me reframe this in terms I'm more familiar with: comics. Those prices are ridiculous these days, too, though not at the same scale. $3.99 for a twenty page comic is ridiculous, though.

But look at trade paperbacks. They're selling for $20 - $25 a pop now, with hardcovers starting closer to $30.

I remember talking to one publisher more than a decade ago about pricing trade paperbacks. He pointed out that pricing a trade at $16.99 or $17.99 is leaving money on the table. The person who is going to spend more than $14.99 on a trade won't pass on it because it's $19.99. Charge those extra bucks. It'll increase your profit margin for free!

There are certain levels people are willing to spend at for certain items. It's like this in the App Store, too. People won't think twice at free. At 99 cents, they won't hesitate too much. At $1.99, you start losing people. But after that? What's the difference between the next few tiers? Maybe there's a diffference between $1.99 and $2.99, but $2.99 and $3.99? $3.99 and $4.99? If it's an app you want, there's no difference there. After the $5 mark, you might as well go straight to $9.99. The difference between $7.99 and $9.99 is nothing to that kind of buyer.

One thing's for certain: The standard tech talk about pricing and economics and scale and all the rest probably won't suffice to explain the Apple Watch next year. Let's see if the industry adapts, or if it's just one big whine fest when this thing comes out.

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