Re: Can't meet demand at $199?
I don't honestly believe the pricing is solely based on supply/demand - I believe it has more to do with cannibalizing existing iPod sales, and recouping R&D costs.
however, while the elasticity is steep for the iPod buyers (due to store reports of people "settling" for more expensive iPods at $100-200 more), the next 1/3rd of the market for other mp3 players seems to be fairly price conscious, at least they're not willling to purchase a $300 music player. if you release a player that is priced not above, but AT the $199 price point, you're going to get a flood of buyers from that 1/3rd of the market, which is more demand than a new product can possibly ramp up for.
keep in mind the harddrives used for the Mini are just beginning production too.
Originally posted by splashman
Let's be a bit careful here. You're assuming that Apple couldn't meet demand at $199, and that this limitation is what dictated the pricing. Honest question: Is that assumption based on anything besides pure speculation?
I don't honestly believe the pricing is solely based on supply/demand - I believe it has more to do with cannibalizing existing iPod sales, and recouping R&D costs.
however, while the elasticity is steep for the iPod buyers (due to store reports of people "settling" for more expensive iPods at $100-200 more), the next 1/3rd of the market for other mp3 players seems to be fairly price conscious, at least they're not willling to purchase a $300 music player. if you release a player that is priced not above, but AT the $199 price point, you're going to get a flood of buyers from that 1/3rd of the market, which is more demand than a new product can possibly ramp up for.
keep in mind the harddrives used for the Mini are just beginning production too.