My idea for a surcharge on apple products during the first month of release

  • Posted: 06 November 2011 07:54 AM

    I used to wonder why apple would allow middle men to profit by reselling apple products for up to double on launch due to limited availability. Why not capture this surcharge themselves? I guess apple is worried this may lead to buyers remorse.  They don’t want to penalize early adopters. But there is a simple solution.  Apple can easily charge more without seeming to charge more in the same way Microsoft bundled the kinect with games when first released. Similarly, when a new iPhone or iPad comes out apple should require the purchase of a 100 or 200 dollar iTunes gift card. Alternatively they could sell only the highest end 64gb models during the first month of release when supply is most imbalanced.  As it stands apple products are obviously underpriced on launch as they are the lowest risk investment for resellers especially those who ship internationally.

         
  • Posted: 06 November 2011 09:46 AM #1

    Screwing your most avid customers and early adopters with a surcharge is a BAD idea. Apple would take a huge reputation hit and rightfully so.

         
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    Posted: 06 November 2011 10:05 AM #2

    I paid this kind of surcharge when I bought the first iPhone from an Apple store soon after it was released. Though eventually Apple relented and gave me a $100 gift card after the press went too negative about the high price.

         
  • Posted: 06 November 2011 10:10 AM #3

    I know some rock bands have had duch auctions on ebay with their tickets. It would be interesting to have few hundred thousand iphones set as duch auction every new release. This way apple could capture that extra money and allow people with no price sensitivity to by for immediate delivery. At the same time the rest would be sold just like now, 1-2 weeks delivery.

         
  • Posted: 06 November 2011 10:33 AM #4

    Well I would much rather pay a few hundred bucks more for a new iPhone from apple rather than off of eBay. Many of the sellers are not trustworthy as ive seen many unlocked att iphone4s for sale which supposedly rarely exists at this point.  When the official unlocked version is released there will be another wave of sellouts due to international demand.  I’m certainly not willing to camp out at an apple store woz style. I’m sure apple would have no problem selling the first million at 1000 bucks extra or the first 10 million at 100 bucks extra. An extra billion in revenues is nothing to sneeze at

    [ Edited: 06 November 2011 10:38 AM by AndrewLing ]      
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    Posted: 06 November 2011 10:56 AM #5

    As I ponder all things Apple, and in my best Jony Ive voice, I hear the words “simple, uncluttered”.

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  • Posted: 06 November 2011 11:11 AM #6

    rezonate - 06 November 2011 02:56 PM

    As I ponder all things Apple, and in my best Jony Ive voice, I hear the words “simple, uncluttered”.

    +1.
    Keep focus on products. Profits will follow.

         
  • Posted: 06 November 2011 11:18 AM #7

    In the voice of John McEnroe:  “You can’t be serious!”

         
  • Posted: 06 November 2011 12:13 PM #8

    AndrewLing - 06 November 2011 11:54 AM

    I used to wonder why apple would allow middle men to profit by reselling apple products for up to double on launch due to limited availability. Why not capture this surcharge themselves? I guess apple is worried this may lead to buyers remorse.  They don’t want to penalize early adopters. But there is a simple solution.  Apple can easily charge more without seeming to charge more in the same way Microsoft bundled the kinect with games when first released. Similarly, when a new iPhone or iPad comes out apple should require the purchase of a 100 or 200 dollar iTunes gift card. Alternatively they could sell only the highest end 64gb models during the first month of release when supply is most imbalanced.  As it stands apple products are obviously underpriced on launch as they are the lowest risk investment for resellers especially those who ship internationally.

    Andrew:

    iPhones are sold directly and indirectly to consumers. Second, the full retail price on subsidized contracts is paid by the carrier, not the customer. Aside from the lawsuits, the federal regulatory investigations and the congressional hearings that would occur over claims of price gouging and unfair trade practices, the plan is simply unworkable. Verizon, AT&T and Sprint can not be obligated to sell iTunes gift cards to customers as part of a bundling deal at launch.

    Second, competitors would have a field day and Apple’s corporate reputation would take a big hit and in many cases destroy the good will Apple has worked hard to create with customers over the past 15 years.

    Apple first and foremost crafts customer relationships. Losing even one customer that might have been a loyal customer for the next five or ten years over a temporary profit grab isn’t worth the money. Apple would lose more than it gained.

    On the iPhone 4S, I had no problem buying a handset. I showed up at my local Apple retail store on the Sunday after release and a half-hour after the store opened and there was no line.  Within about 15 minutes of arriving at the store, I was busy activating two iPhones for members of my household.

         
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    Posted: 06 November 2011 01:14 PM #9

    AndrewLing - 06 November 2011 11:54 AM

    I used to wonder why apple would allow middle men to profit by reselling apple products for up to double on launch due to limited availability. Why not capture this surcharge themselves? I guess apple is worried this may lead to buyers remorse.  They don’t want to penalize early adopters. But there is a simple solution.  Apple can easily charge more without seeming to charge more in the same way Microsoft bundled the kinect with games when first released. Similarly, when a new iPhone or iPad comes out apple should require the purchase of a 100 or 200 dollar iTunes gift card. Alternatively they could sell only the highest end 64gb models during the first month of release when supply is most imbalanced.  As it stands apple products are obviously underpriced on launch as they are the lowest risk investment for resellers especially those who ship internationally.

    I’m suspecting a new troll here. Brad???

         
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    Posted: 06 November 2011 02:33 PM #10

    By having a wide variety of retail outlets as well as the online stores, the demand is spread fairly evenly to the true customers.  Only a small portion goes to the markup crowd.

    I suspect the markup crowd is much like the jewelry market.  A base price plus fluff.

         
  • Posted: 06 November 2011 09:20 PM #11

    I’m not a new troll just new.  I’ve read about every article posted on yahoo finance and appleinsider about apple in the last 18 months.  I have 2x my life savings in apple and own no other stocks.
    Anyway those are good points dawn treader but still doesn’t eliminate the option of selling only high end versions at first such as the 64 gb version.  Btw does anyone know the legal limit of iPhones you can bring into china? I believe it’s 2? I goto china every few months and they’re still selling for 1200 there

         
  • Posted: 06 November 2011 09:34 PM #12

    AndrewLing - 07 November 2011 01:20 AM

    I’m not a new troll just new.  I’ve read about every article posted on yahoo finance and appleinsider about apple in the last 18 months.  I have 2x my life savings in apple and own no other stocks.
    Anyway those are good points dawn treader but still doesn’t eliminate the option of selling only high end versions at first such as the 64 gb version.  Btw does anyone know the legal limit of iPhones you can bring into china? I believe it’s 2? I goto china every few months and they’re still selling for 1200 there

    Andrew:

    You’re not a troll. Established members do get (rightfully) suspicious when a new member arrives and makes a flurry of posts. In your case the concern doesn’t apply.

         
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    Posted: 06 November 2011 09:52 PM #13

    AndrewLing - 07 November 2011 01:20 AM

    I’m not a new troll just new.  I’ve read about every article posted on yahoo finance and appleinsider about apple in the last 18 months.  I have 2x my life savings in apple and own no other stocks.
    snip…..............

    Fair enough: But keep in mind outrageous statements by first time posters makes for knee jerk reactions.

    And yes, I do think your first post was outrageous! First off, Apple doesn’t care ONE WHIT about the blogosphere so any “Shouldn’t Apple do x, y, z…............  ” post is absolutely a waste of bandwidth. Secondly, the premise of your post was wrong-headed from Apple’s cultural/historic perspective. Apple has a well defined marketing/product development approach and one that works pretty damn well.

    Regardless of all that, welcome to AFB and please accept my apology for the hostile initial response.

    Oh, I will throw you another bone…...........  loading up on aapl for the long haul has been a smart long term investing plan. 

        cheers to the longs
          JohnG

         
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    Posted: 06 November 2011 10:46 PM #14

    Apple is all about democratized technology.

    And now that it’s reached a $100B scale, you will NEVER see any kind of product discrimination (example:  utterly ridiculous Sprint iPhone 5, iPhone 4S for everyone else nonsense rumor from BGR), required purchases, highest-end product purposely the only one available at launch, etc. as long as Tim Cook remains CEO and Apple remains Apple.

    You will see more demand, but much more supply.  Those who want the Apple product of their choice on launch day, with a little patience, will continue to get their launch day iPhones and iPads for the most part.  Everyone else will be more or less patient as they have always been.

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    AFB Night Owl Teamâ„¢
    Thanks, Steve.

         
  • Posted: 06 November 2011 11:04 PM #15

    You’re probably right Mav but I hope that by moving to the low end with the free with contract iphone3gs they don’t create an opening at the high end.  Have you ever heard of the Vertu phone?  Not that Vertu is any competition to Apple but Vertu does prove that people are willing to pay from several thousand up to several hundred thousand dollars for a phone that is also a fashion statement.  If Samsung or HTC were to create a phone with top of line specs and sell it for $1500 there would definitely be a market for it in China. It would be a good idea for them to develop such a phone for the sake of prestige much like Ferrari, Mercedes, and Porche are always battling it out for the high end even if they only produce a few hundred such cars a year.