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This is important in another way, too: by offering almost the same thing at two different prices, consumers get to self-select based on how price sensitive they are.

Since some people are willing to pony up significantly more for the black, they can offer the non-black at a slightly lower cost than they otherwise would, which means they can sell MacBooks to a segment of the market that would otherwise consider them out of reach.

Any time virtually the same thing is offered at different prices, you can either complain that it's unfair one target segment has to pay more... or realise that the flip side of the coin is that less price sensitive people subsidise lower costs for more price sensitive people -- which could seem completely fair depending on ideologies.

If you're a hardcore capitalist you see it as a way for the manufacturer to expand their target market without sacrificing profitability. If you're more on the left you see it as taking from the rich and giving it to the poor, without having to resort to coercion.



I have a minor quibble with the term 'subsidizing', since it is still being sold at a profit. It's just a lower margin, because the point of maximal profit in the lower end of a segmented market is necessarily lower than the point of maximal profit in a non-segmented market. It's not going to go into negative profit (and thus enable the customer to buy it "at a loss" for the business, whereby the business is effectively paying part of the cost of the thing on behalf of the customer) as a result of segmentation. So it's neither costing the business profit, nor is it offering the good at a per unit loss. It -is- offering the good at a lower margin than would make sense in an unsegmented market.


You're right, of course. That was a sloppy choice of words on my part.


You might say this is why the iPhone is missing a telephoto lens rather than missing the ultra-wide lens.

Each lens/sensor theoretically costs a very similar amount of manufacturing cost to include, so theoretically if your goal was to give the customer the best value on a cheaper 2-lens phone, you would want to give them the two most used lenses: the normal wide lens and the telephoto lens.

However, Apple gates the more-desired telephoto lens to the Pro model, because it needs to balance the significant price increase with the reality that there isn't much of a manufacturing cost difference between Pro and non-Pro phones.

So, it's a market segmentation based on some desired features.

I disagree with the idea that there's any sort of a positive "flip side" to this strategy from the customers' perspective. This is how profit is maximized. Apple could sell the iPhone 13 Pro for less money and still make a profit, but they know that customers of certain income brackets will pay over a thousand bucks for a phone.

If the iPhone 13 had a telephoto lens instead of the ultra-wide lens, and the ProMotion display, the iPhone 13 wouldn't cost a dime more to manufacture. In this configuration, there would be very little reason for most people to upgrade to the Pro model.


So the theory is basically that if they were to not segment the market this way, the price point of maximal profitability if they offered only one model would be higher than the price point of maximal profitability of the lower segment(s) achieved by segmenting it.

I.e., if the 13 and 13 Pro were nearly identical, yeah, there'd be no reason to upgrade to the pro model, and so Apple, being sensible, would instead offer one model. And the price of that one model would fall somewhere between the 13 and the 13 Pro; meaning that some people who can justify paying for a 13 now would not buy one at all (and you're not extracting as much as you could from those willing to spend more as you could by segmenting it).

By segmenting it, though, the (obviously highly inflated, still super high margin) cost of the 13 is lower, and Apple can put the cost of the 13 Pro higher, because each segment now has its own point of highest profitability (the point where price * number of people who will purchase it at that price is highest; generally the higher the former the lower the latter).

This is also why some graphics cards, for instance, were all made to the higher end specs, and then had chips locked away, damaged, or etc, just to create market segmentation. Even with the fixed margin costs, segmenting the market allows the company to maximize profit, but by doing so it also allows the lower segment to come in at a lower cost than if they were trying to maximize profits with a single segment. It's a "win/win" from an availability/affordability of goods and a corporate profit maximization perspective, even if it feels stupid and unfair to pay extra for the high end card, or be purchasing a 'crippled' card.


>However, Apple gates the more-desired telephoto lens to the Pro model, because it needs to balance the significant price increase with the reality that there isn't much of a manufacturing cost difference between Pro and non-Pro phones.

I believe this choice is because of another much more desired feature: Night Mode™

IIRC It works by overlaying and processing the two images from the ultrawide and wide angle lenses. It's why Night Mode is limited to the wide angle lense, and not available on the ultrawide, as the wide angle lense doesn't provide enough coverage for the ultrawide to produce a Night Mode image.

If Apple included only wide and telephoto, then Night Mode (As currently implemented) would be limited to the telephoto images, which would be a lot less desirable.




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