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The iPod mistake
Apple had done everything right. Their iPods are all the rage today. Go for a walk in a crowded park and you will see people with iPods jogging. According to some resources, iPod has captured more than 60% of the mp3 players market. And yet there is a strong demand for the iPods. Infact, there is a waiting line in most stores to get one!There was only one complaint about the iPods. Their battry lives were short. So Apple came out with newer versions of iPods - with longer battery lives of 12 hours!
And then they made their mistake.
They priced the new iPods at $299 while the old ones were selling successfully at $399. Why? Why price the better iPods at a lower price? Some sources say: "Apple is closing the pricing gap between iPod and competitors."
But if the competition was the problem, why not lower the prices of the old iPods to $299 and set the price of new iPods at $399? That way, they would sell both the versions of iPods and earn more money.
They would capture the lower end market with their older versions and the upper end market with their newer versions.
Reducing the price of something better just doesn't make sense.
Email Post to a friendPosted on 7/21/2004 | Permalink | |
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