Apple recently announced its new iPhone 15. Here is their new pricing and how it compares to the iPhone 14 pricing:
- iPhone 15: starting from $799 (unchanged)
- iPhone 15 Plus: starting from $899 (unchanged)
- iPhone 15 Pro: starting from $1,099 ($100 increase)
- iPhone 15 Pro Max: starting from $1,299 ($200 increase)
Several articles justified the price increase of the 15 Pro versions due to higher costs. They typically mention the titanium case and the higher-end processor.
That makes sense, right? NO! Isn’t it fascinating to see how easy it is to fall into the trap of cost-plus pricing? Our prices do not go up because our costs go up. I’ll bet the cost of making the 14 has increased over the last year, but Apple didn’t raise the price.
Let’s think a little deeper. When we think of pricing as capturing willingness to pay, what do we know about the iPhone 15 Pro and Pro Max? Less price-sensitive people buy them. By adding new capabilities exclusive to those versions, they can easily get away with charging higher prices.
Notice they didn’t raise the prices on the non-Pro versions. These are the versions bought by their price-sensitive customers. There is almost certainly much higher price elasticity on their less expensive phones.
This is a reminder to you with a Good, Better, Best portfolio. Keep improving the Best version. Keep raising the price of the Best. These are your least price-sensitive customers.
What did you take away from Apple’s new iPhone pricing?
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