Thoughts on the iPhone 3G Pricing

June 11th, 2008, by The Angry Drunk

Now that the blo­gok­lein­bot­tle is com­ing down from the WWDC keynote crack-hits, some of the denizens of blo­goland are real­iz­ing that the iPhone 3G isn’t actu­ally the sec­ond com­ing of Jesus (gasp!) One of the biggest themes that I’m pick­ing up sur­rounds the pric­ing changes. I’m not going to link to any of the var­i­ous posts break­ing down the price; because, gods know, I’m lazy and you can’t swing a dead hobo with­out hit­ting some­one blog­ging about it.  The bot­tom line is, the price of the two iPhone 3G mod­els come down by $200; but the data plan and SMS charges have gone up.  In the end, as a few sites have pointed out, you will end up pay­ing more for the iPhone 3G over the life of the 2 year contract.

My view on this is: So what?

I’m bet­ting that iPhones are still gonna fly off the shelves like Marina Sirtis blow-up dolls at a Star Trek con­ven­tion.  What the vast major­ity of the blog­tards fail to get is, pric­ing is all about per­cep­tion.  Why else are the prices “$199″ and “$299″? It’s been shown time and again that con­sumers latch on the the first digit in the price, not the rest.  Also, a one time sav­ings of two hun­dred clams is far more of an incen­tive to many peo­ple than a two hun­dred dol­lar sav­ings spread over 2 years. I know that my wal­let will be scream­ing slightly less when I pry it open in a few weeks.

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  • joe­cab

    Which is also one of the argu­ments Mac users have used on peo­ple who say Windows is cheaper: long term, when you add in stuff like virus soft­ware (and some­times cards for video, sound or net­work­ing), and put a price on your time solv­ing prob­lems, you’ll prob­a­bly be bet­ter off with a Mac.

    Also, I’ve never under­stood this line of think­ing. it’s like peo­ple who tell you to adjust your with­hold­ing so that you’re not giv­ing the gov­ern­ment a free loan just to get a rebate check when you file. Most peo­ple would blow that money if they were receiv­ing it amor­tized over a year; get it in a lump sum and you’re much more likely to do some­thing a lit­tle more con­struc­tive with it, like put it away or pay down some debt.

  • joe­cab

    Which is also one of the argu­ments Mac users have used on peo­ple who say Windows is cheaper: long term, when you add in stuff like virus soft­ware (and some­times cards for video, sound or net­work­ing), and put a price on your time solv­ing prob­lems, you’ll prob­a­bly be bet­ter off with a Mac.

    Also, I’ve never under­stood this line of think­ing. it’s like peo­ple who tell you to adjust your with­hold­ing so that you’re not giv­ing the gov­ern­ment a free loan just to get a rebate check when you file. Most peo­ple would blow that money if they were receiv­ing it amor­tized over a year; get it in a lump sum and you’re much more likely to do some­thing a lit­tle more con­struc­tive with it, like put it away or pay down some debt.

  • http://www.theangrydrunk.com The Angry Drunk

    @joe­cab:

    Not sure whether you’re agree­ing or dis­agree­ing :) All I’m say­ing is that your aver­age con­sumer ranks TCO some­where below “what the guy down the street will think” in terms of importance.

  • http://www.theangrydrunk.com The Angry Drunk

    @joe­cab:

    Not sure whether you’re agree­ing or dis­agree­ing :) All I’m say­ing is that your aver­age con­sumer ranks TCO some­where below “what the guy down the street will think” in terms of importance.

  • joe­cab

    Oops — I was agree­ing :)

  • joe­cab

    Oops — I was agree­ing :)

  • http://www.theangrydrunk.com The Angry Drunk

    @joe­cab:

    No need for “oops.” Part of my con­fu­sion is that this is a com­pli­cated topic, more so than the link-bait bab­ble from the blo­gos­phere gives it credit for.

    Arguably, as con­sumers, we should be look­ing at things like TCO and envi­ron­men­tal impact, and a dozen other costs not eas­ily summed up in a sin­gle price point. Unfortunately, mar­keters learned long ago that con­sumers are lazy.

    My frus­tra­tion is in the incon­sis­tency on the part of the media. Why is TCO sud­denly a big deal with this par­tic­u­lar cell phone out of all the cell phones ever released in the his­tory of cellphonedom?

  • http://www.theangrydrunk.com The Angry Drunk

    @joe­cab:

    No need for “oops.” Part of my con­fu­sion is that this is a com­pli­cated topic, more so than the link-bait bab­ble from the blo­gos­phere gives it credit for.

    Arguably, as con­sumers, we should be look­ing at things like TCO and envi­ron­men­tal impact, and a dozen other costs not eas­ily summed up in a sin­gle price point. Unfortunately, mar­keters learned long ago that con­sumers are lazy.

    My frus­tra­tion is in the incon­sis­tency on the part of the media. Why is TCO sud­denly a big deal with this par­tic­u­lar cell phone out of all the cell phones ever released in the his­tory of cellphonedom?

  • MikieV

    “I’m bet­ting that iPhones are still gonna fly off the shelves like Marina Sirtis blow-up dolls at a Star Trek convention.”

    Yes, they did.

    “Why is TCO sud­denly a big deal with this par­tic­u­lar cell phone out of all the cell phones ever released in the his­tory of cellphonedom?”

    Yes, it does smell of some kind of con­spir­acy… but its too wide-spread it can’t be orga­nized. I guess it just shows how many dif­fer­ent vested-interests feel threat­ened by such a game-changing device.

  • MikieV

    “I’m bet­ting that iPhones are still gonna fly off the shelves like Marina Sirtis blow-up dolls at a Star Trek convention.”

    Yes, they did.

    “Why is TCO sud­denly a big deal with this par­tic­u­lar cell phone out of all the cell phones ever released in the his­tory of cellphonedom?”

    Yes, it does smell of some kind of con­spir­acy… but its too wide-spread it can’t be orga­nized. I guess it just shows how many dif­fer­ent vested-interests feel threat­ened by such a game-changing device.