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How high can you go?

Image from Apple.com

Last week, Apple unveiled the latest and greatest in its lineup of iPhones, Apple Watches and Apple TV. By far, the lion’s share of publicity has been garnered by the two new iPhones coming out, the iPhone 8 and the X. For anyone who has been able to ignore the constant bombardment of news, reviews and critiques that have been spewing forth, version 8 is being positioned as an enhanced, upgraded version of the “traditional” iPhone, while with the X, we, to quote the Apple site, “Say hello to the future.” Along with saying hello to the future, we also say hello to the $999 cell phone.

There has been no shortage of outrage, debate and judgment concerning the pros/cons/ridiculousness of paying $1,000 for a phone (no one being fooled in this case by the psychology of pricing just below the even dollar). But ultimately, consumer wallets will attest to the success or failure of the X. It is too soon to make a definitive statement on the X, since it will not be available for pre-order until October 27. And, of course, there is always the “gotta have” the latest gadget crowd. However, early indications are that, even beyond the core gadget group, those that feel they can afford too may be passing on the “humdrum” 8, with pricing slightly above that of previous iPhones, in favor of the X. This may be partially the result of an accidental (but it’s Apple, so it’s hard to believe anything is being done accidentally) or intentional positioning strategy.

If it were a simple choice between keeping one’s old phone and spending several hundred dollars more for the X, the jump would likely seem even more significant and perhaps off-putting when it comes to the purchase decision. By inserting an interim product with an interim price, it softened the leap to the more expensive phone by leading to the question “Do I want to pay more for a similar product or pay more, even if it’s a significant amount more, for something that seems really different?” It appears the answer may be that people will pay a lot more for something new and exciting. In other words, we’ll pay more if, on the spectrum of available goods and services, the premium price paid is commensurate with the premium goods delivered.