How Apple plays with price barriers to peddle iPhone X to both masses and classes
ECONOMICTIMES.COM|
Updated: Sep 29, 2017, 02.27 PM IST
NEW DELHI: As the iPhone 8 series goes on sale today, there are reports that most of the potential buyers are waiting for the pricier and much-hyped iPhone X, which would be available just after a month. The bookings ahead of the local launch are said to be about half of what the iPhone 7 and 7Plus recorded a year ago.
Some may argue that a pricier iPhone X will make buyers perceive iPhone 8 as a deal even if it's still expensive in comparison with the previous model. But few would want to buy the latest iPhone 8 and still remain behind the curve. Obsolescence is a big driver of smartphone upgrades. iPhone X pushes iPhone 8 two notches down the evolutionary ladder.
There could be another reason why buyers could prefer iPhone X to iPhone 8 — it's the clever pricing of iPhone X that does not count the price-sensitive buyers out.
Though iPhone X is special as the 10th anniversary edition and might be targeting high-end buyers, it is still priced like a regular new model. iPhone X, to be launched on November 3, will be priced at Rs 89,000 (64GB model) and Rs 1.02 lakh (256GB).
Apple has cleverly played with mental price barriers to attract high-end as well as price-sensitive buyers. It deploys the the age-old psychological pricing with 9's, such as Rs 9.99.
The entry-level model at Rs 89,000 just stops short of Rs 90,000 mark, suggesting a value pricing. It conveys to the buyer that the price is 'low', since it doesn't cross the price barrier of Rs 90,000. It can be an effective lure for a price-conscious iPhone user who wants to upgrade to the next model. iPhone X at Rs 89,000 could still be far more expensive than iPhone 8 but psychological pricing makes it appear as if it is cheaper than what it could be. The buyer planning to upgrade to iPhone 8 will at least consider the proposition.
On the contrary, the price of Rs 1.02 lakh for the 256GB barely breaches another mental price barrier, Rs 1 lakh. This psychological pricing assures the high-end customer that he has crossed a class mark and entered an exclusive club. The price lures the buyer who perceives himself as privileged. iPhone has emerged as a primary class marker in India. After car, smartphone is the biggest status symbol. Many would buy an iPhone not just for its features but also as an instant marker of their class.
The psychological pricing might be making a large number of buyers wait for iPhone X instead of buying iPhone 8. Maybe Apple has planned iPhone 8 as a blip in its evolutionary rhythm and just dropped iPhone 9 out. The model after iPhone X could begin a whole new series—and start at Rs 99,999, which would look like a bargain.
Some may argue that a pricier iPhone X will make buyers perceive iPhone 8 as a deal even if it's still expensive in comparison with the previous model. But few would want to buy the latest iPhone 8 and still remain behind the curve. Obsolescence is a big driver of smartphone upgrades. iPhone X pushes iPhone 8 two notches down the evolutionary ladder.
There could be another reason why buyers could prefer iPhone X to iPhone 8 — it's the clever pricing of iPhone X that does not count the price-sensitive buyers out.
Though iPhone X is special as the 10th anniversary edition and might be targeting high-end buyers, it is still priced like a regular new model. iPhone X, to be launched on November 3, will be priced at Rs 89,000 (64GB model) and Rs 1.02 lakh (256GB).
Apple has cleverly played with mental price barriers to attract high-end as well as price-sensitive buyers. It deploys the the age-old psychological pricing with 9's, such as Rs 9.99.
The entry-level model at Rs 89,000 just stops short of Rs 90,000 mark, suggesting a value pricing. It conveys to the buyer that the price is 'low', since it doesn't cross the price barrier of Rs 90,000. It can be an effective lure for a price-conscious iPhone user who wants to upgrade to the next model. iPhone X at Rs 89,000 could still be far more expensive than iPhone 8 but psychological pricing makes it appear as if it is cheaper than what it could be. The buyer planning to upgrade to iPhone 8 will at least consider the proposition.
On the contrary, the price of Rs 1.02 lakh for the 256GB barely breaches another mental price barrier, Rs 1 lakh. This psychological pricing assures the high-end customer that he has crossed a class mark and entered an exclusive club. The price lures the buyer who perceives himself as privileged. iPhone has emerged as a primary class marker in India. After car, smartphone is the biggest status symbol. Many would buy an iPhone not just for its features but also as an instant marker of their class.
The psychological pricing might be making a large number of buyers wait for iPhone X instead of buying iPhone 8. Maybe Apple has planned iPhone 8 as a blip in its evolutionary rhythm and just dropped iPhone 9 out. The model after iPhone X could begin a whole new series—and start at Rs 99,999, which would look like a bargain.
