Cracks me up to read this articles where these broke-ass reporters wring their little hands and wonder if the “high price” of the iPhone will hurt demand. Have you idiots not figured it out yet? Higher prices make people want things more. Jesus. Have you learned nothing?
For a certain segment of the population, ridiculously high prices are not off-putting. Quite the opposite, they are an incentive. Look at Rolex watches. No better than a Timex, really. Probably worse. But since they charge so much for Rolexes, every nouveau riche asshole in the world figures he’s gotta have one. Another example: Bose speakers. Friggin things cost fifty cents to build and sound like crap. Yet Bose sells a whole set-up for two thousand bucks. Damn you, Bose! You are my inspiration.
To be sure, it took some time for me to develop the correct overpricing strategy. With the NeXT machine, we figured out what would be a fair price, and then we quadrupled that price, and sure enough, people lined up to buy them. Or some people did anyway. Problem is, we kinda priced ourselves out of being a mass market company. Meanwhile, Microsoft – God, just to write that word makes me feel slightly nauseated – was pushing Windows. Their stuff was like a Special Olympics version of what we’d done at Apple. But it was cheap, and it came bundled onto all the butt-ugly PCs in the world. So frigtards went out and bought their PCs and got stuck with Windows and, tragic as this may seem, many of them actually considered this to be a wonderful thing.
I weep for those people.
The only reason Windows caught on was that none of these frigtard customers ever got a chance to see the Mac, or better yet, the NeXT machine. Yes, this was perhaps my own fault, for pricing my machines so high that ordinary frigtards wouldn’t look at them. But my feeling is that we could do in computers what BMW did with cars. Cool rich asshole-type people would buy our stuff, and then poor lametards would want to have the same thing that the rich assholes had. And once our stuff caught on with cool rich people we’d gradually introduce some lower-end models that aspiring lame-ass people could afford. But I sure as hell wasn’t going to just cut my prices. More people eat at McDonald’s than at French Laundry. Does that mean Thomas Keller should charge fifty cents for a meal, to bring in the crowds? I don’t think so.
Well, my strategy didn’t quite work out. The lamebrains just stayed happy with their Windows machines, and didn’t really care what rich cool people were buying. Long story short, NeXT had some issues. So did Apple.
But when I came back, a decade ago, I refined the overpricing strategy. The iMacs were still overpriced, but this time I’d learned my lesson. Instead of charging four times as much as we needed to, we only overcharged by fifty percent. Bingo. We’d found the magic number. Suddenly people who would never have used a Mac before were tossing out their Windows PCs and switching to Macs and feeling all proud for driving a BMW instead of a Toyota.
Same goes for the iPhone. It’s the magic rule of “1.5x” where x represents the cost the product should have, or the cost that comparable products in the market have.
So rest your little heads, weary hacks at the Times and Journal and everywhere else. Old Daddy Steve knows exactly what he’s doing.