AirPods and Apple Watch Called 'Underpriced' to Bring New Users Into Apple Ecosystem

Discussion in ' News Discussion' started by MacRumors, Mar 16, 2017.

  1. MacRumors macrumors bot


    Apr 12, 2001

    Apple is underpricing AirPods and the Apple Watch in an effort to bring new users into its ecosystem, according to Neil Cybart of Above Avalon. The analyst said this pricing strategy was "unimaginable" ten years ago, when Apple was often accused of pricing products artificially high, aka "Apple Tax."


    AirPods cost $159 in the United States, which Cybart said is "surprisingly low" compared to competing truly wireless headphones:
    Cybart believes a strong case could have been made for Apple to price its AirPods at $249, or even $299, but by selling them for $159, he thinks Apple has "removed all available oxygen from the wireless headphone space" and forced competitors to cut pricing in an attempt to better compete.

    Earin's wireless headphones now start at $199, for example, while Motorola's VerveOnes+ are on sale for $189.99. Even at those discounted prices, however, AirPods are still cheaper at $159.

    AirPods are estimated to ship in six weeks on Apple's online store, and it has been that way since the day after they launched in December.

    Cybart said a similar pricing dynamic is found with the Apple Watch, which now starts at $269 for Series 1 models:
    Cybart believes the pricing of the Apple Watch demonstrates how Apple is looking to capture not only the premium segment of the wearables market, but rather the entire market. While an entry-level Apple Watch costs $269, for example, a ceramic Apple Watch Edition costs upwards of $1,249.

    His research note theorizes that Apple could be more effective now at mass producing products at a lower cost, while offering price points that appeal to a wider variety of users. Higher-priced Apple Watch SKUs likely offset the lower margins of Apple Watch Series 1 models as well, he said.

    He even thinks that an Apple Watch for $199 is "inevitable," although there might be less wiggle room for products such as iPads.

    Overall, Cybart thinks Apple is in essence "redefining luxury" by offering lower prices while, at the same time, becoming more of a luxury brand. He expects it to be difficult for other consumer tech companies to compete with that strategy.

    Of course, many Apple products are still unquestionably expensive. The latest 15-inch MacBook Pro with Touch Bar starts at $2,399, while an iPhone can cost upwards of $969. The 12.9-inch iPad Pro is priced from $799, and a handful of Apple Watch models run over $1,000. All prices are based on U.S. dollars.

    Full Article: The Curious State of Apple Product Pricing on Above Avalon

    Article Link: AirPods and Apple Watch Called 'Underpriced' to Bring New Users Into Apple Ecosystem
  2. Appleaker macrumors 68000

    Jun 13, 2016
    No, I think it is just the nature of these products in terms of price elasticity. Although it's possible AirPods could have been priced higher with the current market, as this price still doesn't appeal to many.
  3. jmh600cbr macrumors 6502a


    Feb 14, 2012
  4. PilotWoo macrumors regular

    Jul 14, 2006
  5. Zaft macrumors 68040


    Jun 16, 2009
    Brooklyn, NY
  6. V.K. macrumors 6502a


    Dec 5, 2007
    Toronto, Canada
    When has Apple ever underpriced any new hardware product? I don't recall that happening once. Pretty sure they are still making north of 30% profit on AirPods.
  7. Corrode macrumors 6502a


    Dec 26, 2008
    Calgary, AB
  8. nt5672 macrumors 65816

    Jun 30, 2007
    No need to sell a good priced MacBook Pro with lots of capability when Apple can discount ear buds in a failed attempt to fool people into the expensive and less capable Apple eco-system.
  9. shareef777 macrumors 68020


    Jul 26, 2005
    Chicago, IL
    Lol, next they'll be talking about the MBPs being over powered!
  10. vertical smile macrumors 68000

    vertical smile

    Sep 23, 2014
    I was thinking of getting a pair as the EarPods fit me well. But, you cannot adjust the volume during a phone call. If there was any listening situation that require adjustments to the volume, a phone conversation would be it.

    Wireless head phones for a fraction of the price of the AirPods can adjust the volume during a phone call.
  11. tongxinshe macrumors 6502a

    Feb 24, 2008
    I can easily find bluetooth earphones for $20.
    $300 and north for an extremely heavy weight electric watch, which expires in 2-3 years, and you call it underpriced? What year is it now? Maybe we overslept and the gold price is already $30000 an ounce nowadays?
  12. akfgpuppet macrumors regular


    Feb 5, 2011
    The 831
    I mean series 2 starts at $369, putting it up with the other much more expensive watches.
  13. Jnesbitt82 macrumors 6502


    Oct 21, 2013
    OMG! This makes me feel so much better! I'll go buy 5 of each right meow!
  14. OldSchoolMacGuy macrumors 68040


    Jul 10, 2008
    Both require an iPhone for use. If you get someone hooked on the Apple Watch or AirPods, you don't have to worry about them leaving for Android as it's simply not an option. Small price to pay to keep people using their phones where they make far more money.
  15. dotdotdot macrumors 68020

    Jan 23, 2005
    Underpriced? How does that make sense.

    The Watch Series 1 argument could be made, but thats because it's last years tech.

    But AirPods? They look decent and their functionality is awesome, but they have 0 isolation and sub-par sound quality - the exact same sound quality you'd get if you used the FREE wired headphones included with every iPhone.
  16. Lihp8270 macrumors regular

    Dec 31, 2016
    What totally wireless in ear headphones are a fraction of the price?
  17. oghowie macrumors 6502a


    Jul 12, 2008
    The hate is strong in this thread.

    Seriously though, which wireless headset that doesn't have a wire connecting the 2 earpods is around this price and better? I run with a $10 bluetooth headset, but I wouldn't say it's the same thing as the Airpods.
  18. MoodySasquatch macrumors newbie


    Feb 14, 2017
    Whatever helps you justify your purchase I guess.
  19. WarHeadz macrumors 6502a


    Aug 30, 2015
    Los Angeles
    This literally makes zero sense. Anyone buying an Watch or AirPods is already in the ecosystem. An Watch doesn't work without an Phone (which is what the iPhone should be renamed to).
  20. sharleyP macrumors newbie

    Mar 8, 2017
    I hope Tim Cook will not read that - it may give him some bad ideas.
  21. MH01 macrumors G5


    Feb 11, 2008
    You need a damn iPhone to use the watch and AirPods my ass!! most expansive into to any ecosystem
  22. tongxinshe macrumors 6502a

    Feb 24, 2008
    The true reason is, these two are still niche markets and cannot attract serious competitors into them, yet.
  23. Phone Junky macrumors 6502a

    Oct 29, 2011
    Sunshine State
    AirPods work with anything that regular bluetooth headphones work with.
  24. shareef777 macrumors 68020


    Jul 26, 2005
    Chicago, IL
    This! The iPhone is thee gateway system. You can tell because everything is now designed and built around the iPhone and its OS. MacOS is becoming more like iOS, the iPad which can do so much more then the iPhone is still crippled with iOS, and the AirPod/watch are really only made for the iPhone. And yet there are rumors that the next iPhone price is going up (the higher selling plus model already did).
  25. longofest Editor emeritus


    Jul 10, 2003
    Falls Church, VA
    Airpods - maybe
    Apple Watch - not a chance, considering its competition is all priced lower.

Share This Page