Five lessons from Apple’s iPhone pricing
We all know Apple still runs the most profitable business on the planet. Most of us mere mortals will never be able to match the pricing power behind Apple’s success. And yes, the new iPhone is not nearly as innovative as we had hoped for. Nevertheless, we all can take a page from Apple on how to make the most from the pricing power you do have. So here are five pricing lessons Apple applies well to maximize profits from its iPhone business.
Very few price drivers are used masterfully to shape the iPhone portfolio
Apple consciously chooses higher margins rather than excessive market share
International prices are carefully adjusted for each market
Prices are kept high in own channels to preserve a premium price image
Apple generates even higher margins with services provided around the iPhone
What do you think? Would these strategies work for you? Please let us know using the comment function. Learn about other ways to make better use of your pricing power here.
Frank Bilstein is a partner in A.T. Kearney’s Strategy & Top Line Transformation practice, leading the firm’s global pricing activities. With more than 150 pricing projects globally, he is arguably one of the world’s most experienced pricing consultants.
Felix Hoffmann is a manager in A.T. Kearney’s Strategy & Top Line Transformation practice.
Check out some of our other pricing posts:
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- Digital Dynamic Pricing: "Dark Side of the Force"?
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- The force is awakening: Digital pricing in banking
- Why Big Data is like teenage sex in B2B pricing
- Target's new price matching policy: a race to the bottom or the top?
- How Samsung et al. should react to Apple's price hold
- Why Apple should raise prices for its iPhone 6s