Consumer is the king for he decides what should be the price of a product, particularly if the economy is picking up from a recession.
The latest indication of the consumer’s power is seen in the Apple’s reported decision to cut the price of its iPod, a portable media player.
Reports quoted Credit Suisse analyst Bill Shope as saying the Apple is “evidently quite willing to get even more aggressive” with the iPod’s $499 to $829 pricing. He added that if the product was not attracting as many customers as it expected, there could be a price cut.
Apple had cut the price of its iPhone by $200 two months after it was launched.
Apple is said to make a margin of nearly 43 percent on iPod, so presumably it can easily afford to reduce the price to make it affordable to a larger number of people.
The slashing of the price could turn many of the fence-sitters into iPod owners. However, so far there has been no official announcement from Apple on any price reduction. This makes one wonder if they are trying to test the waters.