| My hypothesis is that it's about encouraging upgrades rather than increasing the cheap market. I've heard from multiple sources that Apple computer and devices have a much higher resale value than other electronics. I've never understood this from a Moore's law perspective, but I've been shown compelling evidence that it's true. Now, imagine that you own an iPad 2 and want to upgrade to the latest iPad. You'd start by saying that the iPad is $700 and then subtract off the amount you'd get for your iPad 2 on eBay. Natively, I'd say that the device is two and a half years old, so you'd drop the original price by a little under a factor of four, so I'd sell it for $200. Thus I need $500 to buy the latest iPad. Of course, I've now seen that the iPad 2 is a $600 device, new. Droping off a factor of two, because it's used, I put it up on eBay for $300. I now only need $400 to get the latest iPad. Apple just saved me $100 without actually cutting a penny from their own sales. Of course, they could have made more money buy selling the iPad 2 directly to the person I sold it to on eBay, but that jsut creates a larger iPad 2 install base that the need to deal with. They get more money in the short run, but they then have to deal with fragmentation in the long run. Instead, they've now made the used market more expensive, discouraging used buyers while encouraging upgrades. |