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June 1, 2013

device pricing

Tags: Products — 12:02 am Comments (0)

Current pricing for the benchmark products versus what I think the price should be in the table below. I’m curious what the actual revenue per device would be if the the price were lowered because there’s additional revenue outside of the purchase, e.g. ad and search revenue, subscriptions (iCloud, etc), games, music and movie downloads. With lower initial device pricing, there’d be more devices out there, more downstream revenue, and a faster upgrade cycle. I’m sure they’ve run the numbers though. Obviously this is just wishful thinking. At some point we’ll reach the razor-razor blade model where the razor will be cheap or near free. Right now folks are still making good margins on the razors.

iPhone – $649 -> $299
iPad mini – $329 -> $249
iPad – $499 -> $399
Nexus 4 – $299 -> $199
Nexus 7 – $199 -> $149



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