Apple's Brilliant Pricing Strategy

Setting prices is one of the most difficult things to figure out in Marketing and Product Management.  There’s no simple formula to follow.  On the upside, psychology is being applied more frequently to understand buying decisions and there is more and more research on the subject.

Here’s an article that I just read on Business Insider about Apple’s pricing for the new iPhone 6:  Thanks To Apple's Financial Geniuses, The iPhone 6 Isn't Just A Smartphone — It's A Magic Profit Machine.  Brilliant.  When I made my iPhone 6 purchase decision, I never hesitated to upgrade memory to the maximum amount.  The basic level model with 16GB of storage isn't even an option that I would consider.  Neither is the mid-level upgrade--I already have a hard time with my old iPhone that has 64GB of storage.

The high price of the extra storage is annoying to me—but absolutely worth it.  As a result, Apple is making $160 extra in pure profit from me.  And the Apple money-making machine has shifted to an even higher gear!