I was in the Apple store last week to get my son an iPad

Oct 04, 2022

I was in the Apple store last week to get my son an iPad. We got an appointment almost straight away and the young attendant came to assist us. He was very knowledgeable about the products as you can imagine and took us through the various iPad models. 

It didn’t surprise me that there was a choice of 3 in a line next to each other

  1. The iPad
  2. The iPad Air and
  3. The iPad Pro

The price ranged from £319 for the entry level iPad and £999 for the iPad Pro 12.9”. Mind you they were the base models of each and if you went for additional levels of storage space then the price went up even more. Our young attendant was at pains to point out that the iPad Air represented very good value for money and couldn’t understand why people would pay so much more for the iPad Pro. They had the same M1 chip so processing wise they were on a par. The only additional things on the Pro were the extra lens on the rear camera and a slightly bigger and better display. You could tell he wasn’t on commission. 

I knew very well why Apple had a much higher priced iPad that wasn’t too much different from the Air.  It’s to provide that ‘anchoring’ effect - to make the iPad Air ‘look’ cheaper in comparison. Because we don’t really know whether a price is reasonable or not - we look for contrasts and comparisons. Apple are smart when it comes to pricing. 

They are advised by the top Pricing Consultants in the world (yes they are a thing) And Apple know that when you give people a choice of 3 most people will go for the middle option. But there are some people who always want the best things in life and will go for the most expensive one. Because they don’t want to miss out on ANYTHING (think FOMO) And the result is that Apple makes a lot more money compared to just having one version. 

Apple also know that “prices don’t come from costs”.

That’s why the price of an iPad has nothing to do with its cost. If it did we’d be able to pick one up for £100 on a 50% mark up. And then they upsell a pencil for £120!. It’s no surprise that Apple is one of the most profitable firms on the planet. Take a leaf out of Apple’s book. Work on your pricing. Transform your Profits.