iPod pricing

Have you noticed that iPod pricing is suspiciously consistent across retailers?

The Trade Practices Act prohibits price coercion, doesn’t it?

How are Apple getting around this?

I suspect that there’s next to no margin on the iPods themselves, but the accessories are high margin. So there’s no room to discount, but the profit comes from the impulse upsell. But this theory doesn’t make a huge amount of sense to me, unless Apple’s making their money on iTunes rather than the iPods.

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3 thoughts on “iPod pricing

  1. daniel

    The Good Guys’ catalogue shows the usual iPod prices, with “Less for cash” stamped on it, so discounts are around. But yes, the lack of competition is suspicious (and well-known amongst Apple dealers of Macs).

    Apple does make enormous amounts of money off both the iPods and iTunes. It’s not like buying a subsidised XBox, where they make money off the software because you’re locked into their licensees.

  2. Philip

    Yeah I’d say the wholesale price is high and the RRP is about $10 more. And shops know that people won’t pay more than the RRP even though they are allowed to charge it. As a result Apple makes all the money.

    Shops won’t stop selling the stuff because they’d certainly make all their money on the accessories. And the people who only want an iPod and won’t buy a competitor’s product, even if it’s better, are probably likely to buy other things from your shop too if you sell iPods.

    I’d say Apple is doing nothing illegal, but they are selling their stuff at a price that makes it nearly impossible for retailers to make a profit on it. That’s certainly the case with their computers. And if Telstra can do it with ADSL prices, then Apple can do it too.

  3. Lou

    The reason prices are consistent across retailers is the fact that ipod do not allow
    retailers to discount their ipod’s in any way (other than the $4 discount the good guys
    gives you!. It has been made known that Apple will refuse to supply ipod’s to any retailers
    who discount the price of the product.
    It’s all about ‘reputation’. So if a retailer decides to sell an ipod nano for $250, Apple
    will most likely give them a warning, and after that, no longer supply them with any…
    I really despise apple for this!!!

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