How Apple plays the pricing game

How Apple plays the pricing game - Business - Bloomberg Businessweek - msnbc.com

"Next time you're sitting at an airport bar and hear two businesspeople debate whether Apple is a technology or design company, chime in: 'Nope. What Steve Jobs sells is pricing.'

Pricing? You bet.

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.

What gives? Watch Apple, and you can learn pricing tricks for your own business.

First, understand that pricing games are vital for Apple, because competition is fierce in the tech world and product hits just don't last.

The current iPad costs $499 in its lowest-powered configuration vs. the Archos 7 Home Tablet ($189) or the Dell Streak ($299 with a two-year AT&T contract). And competitors are rushing to offer more functionality for hundreds of dollars less; the Streak tablet throws in a videocam and phone, which iPads don't yet match.

Apple's touchscreen buzz window is closing fast, and even though it will inevitably add features - I predict the iPad will sport a camera, videocam, and phone within two years - today's tech wonders, like the much-copied iPhone, become tomorrow's commodity.

So let's count the ways Apple defends itself with pricing.

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