Insider Finance - Business - Apple's absurd price tag

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June 8, 2023

Hi, Insiders! This is Lisa Ryan, an executive editor on Insider’s audience team, writing to you from a very smoky New York City. Apple released its much-anticipated Vision Pro headset this week. The two biggest problems seem to be: 1. You look goofy wearing it, and 2. It’s extremely expensive. But in today’s Big Story, our editor in chief Nicholas Carlson dives into why that $3,499 price tag is actually part of a brilliant strategy.

We’re also covering:

Let’s be honest — CNN’s next CEO is screwed.
Why the SEC's lawsuits against Coinbase and Binance are a big deal.
Google tells NYC office staff to WFH as smoke covers the east coast.

— Lisa Ryan

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THE BIG STORY

Apple's absurd price tag

Is this a picture of a person wondering whether $4,000 was too much to spend on a face computer? Apple

The crowd at the unveiling of Apple's Vision Pro headset audibly groaned when they found out how wildly expensive it was: $3,499. But setting the price so high is actually really smart.

Insider’s Nicholas Carlson texted with Matthew Ball, an investor in the metaverse world and an advisor to a bunch of companies, who told him that Apple’s taking a “Tesla approach — start with the Model S, eventually get to the Model 3, and then keep lowering its price while improving its performance.”

This strategy is called "price skimming," where a company sets the initial price of a product very high, then gradually lowers it over time. Apple knows that early adopters are likely to pay, it'll keep profits high, and it's good for the brand.

Plus, Apple has never had much issue with charging more for its devices than competitors. After all, when the first iPhone was announced in 2007, it cost $499 for the basic 4GB model — and you could get a good Blackberry for $200 at the time.

READ THE FULL STORY HERE

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CNN, wildfires, & AI

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Wildfire smoke is making parts of the northeastern US look like Mars. Wildfires in eastern Canada sent plumes south. In NYC, thick smoke prompted airport ground stops and delays. Google told staff in the city to work from home. Actor Jodie Comer couldn't breathe during her Broadway show. A timelapse video shows smoke engulfing the skyline.
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The SEC is waging an “all-out assault” on crypto. It's been a watershed week for the cryptocurrency industry, in the wake of SEC lawsuits against Binance and Coinbase. Experts said the suits were a real threat to how both businesses operated in the US.
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AI could save the stock market. AI-affiliated mega-cap stocks like Nvidia have been backstopping a market facing a series of headwinds. It's a push-and-pull relationship that could define stocks for the next decade.
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TAKE A LOOK

Wave House

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Inside a legendary Malibu beach house. Wave House, which counts Rod Stewart among its former owners, sits right on the edge of Malibu’s famous beach. It’s just hit the market for the first time in 36 years for a whopping $49.5 million. Take a look inside.

WATCH THIS

NYC smoky air

New York City had the worst air pollution in the world this week when smoke from Canada's wildfires covered the area. Watch here.

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This edition was curated by Lisa Ryan, and edited by Hallam Bullock, Nathan Rennolds, and J.R. Stacey. Get in touch: insidertoday@insider.com.

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Insider Finance - Business - Apple's absurd price tag

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