Teaching point: It’s always easier to lower a product’s price than to raise it. That’s called the “ratchet effect”. So, it often makes sense try launch at a high price to ‘skim’ the market. If the market resists, cut the price until you hit the sweet spot.
A blizzard of speculation is building over Apple’s as-yet-unconfirmed release of a tablet computer.
Among other things, the tablet is expected to offer e-books and TV programs. Apple has been trying to get TV networks to license their programming for a subscription service planned as part of a revamp of iTunes, presumably with the tablet in mind.
Assuming the talk is correct, it is hard to see the device proving immediately attractive to the mass market given a price expected somewhere between $500 and $900.
The iPhone wasn’t a big seller when it first released at $499 and $599. Apple quickly lowered that to $399.
But it was only when Apple renegotiated its deal with AT&T, cutting the price for the cheapest model to $199, that sales really took off.
The iPhone will remain Apple’s growth engine for the company for a while yet.
WSJ: Apple’s Hard-to-Swallow Tablet, Dec. 30, 2009
http://online.wsj.com/article/SB10001424052748703510304574626213985068436.html?mod=djemMM
The Homa Files 
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