A brief History of Overpricing: iPhone, Kindle, and iPad

Why is it that a new product vying for a new market is unreasonably overpriced?  It is hard to reason, especially when such a device is a closed device and brings a constant source of income to the manufacturer by multiple means.  Are they insecure about their products’ success and try to cash in as much as possible?

Here is a recent history of overpricing from a short memory.

Apple iPhone

iphone 300x179 A brief History of Overpricing: iPhone, Kindle, and iPadApple introduced iPhone on June 2007. The introductory prices of the two iPhone models were

  • $499 for an iPhone with 4GB space
  • $599 for an iPhone with 8GB space.

These whopping prices were in addition to the two year contract with AT&T. There were no Apps back then, later on Apple opened up third party applications in iPhone.  Apple soon realized the overpricing mistake (or the potential of iPhone’s market) and slashed the prices by $200 with in a couple of months. By 2009 summer, much improved 8GB iPhone model was priced just $99 (with AT&T contract).  Yes, $599 to $99 in less than two years!

Amazon Kindle

kindle 300x299 A brief History of Overpricing: iPhone, Kindle, and iPadAmazon followed the footsteps of Apple iPhone and released the first generation Kindle (6 inch) in Nov. 2007 for $399.  Kindle was received with good reviews and remained as a top-seller in Amazon Amazon Kindle-I had 6 inch display with just 250MB internal memory (expandable with external SD card). It could hold only about 200 eBooks.  Amazon soon dropped the price by $50.

Later in Oct. 2009, Amazon reduced the price of much improved 6 inch Kindle to $259.  Kindle 2 has 2G internal memory and it can hold about 2,000 books.  For single purpose eBook reading device, Amazon Kindle is over priced even now. This is probably because until the release of iPad, Kindle did not have any real competitor.  Analysts predict that the multi-purpose iPad could kill Kindle if Amazon does not drop the price of Kindle  to ~$100.

Apple iPad

nipad 300x205 A brief History of Overpricing: iPhone, Kindle, and iPadIs Apple iPad overpriced? Could Apple reduce the cost of iPad? Apple iPad is priced much better when compared to Kindle (and introductory the iPhone) for the number of things you can do with iPad.  No video camera? No USB port? $130 for 3G? $15 per month for 250MB? For all the talk of “killing laptops and netbooks”, it is overpriced in terms of the missing basic features of a netbook/laptop. Will Apple reduce the price of iPad in the near future?


Comments

  1. Greg says

    “$130 for 3G? $15 per month for 250MB?”

    —> The 3G portion may be on the stiffer side, but i suspect that’s as much as a programming fee as it is a hardware side, as for the data pricing: $15 for 250mb and $30 for unlimited, with no contracts? Really? I nearly did a backflip. You simply can’t beat that data pricing. A similar data plan for unlimited on another carrier runs around $70 for a high-data-throughput devices (e.g. iPad, Netbooks, Laptops).

    I mean, I cut on AT&T wherever possible (as a Verizon customer) — but at those prices, I couldn’t care less who the carrier is. They’ve got 3G where I live—if I get an iPad with 3G, I’ll be sold on AT&T. If the iPad comes to Verizon, they’d better be quick to negotiate a similar deal.

  2. says

    I enjoyed reading your blog. I just read that Brits vote iPhone 8th greatest invention. I love my Iphone.

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