Chapter 52 Question 045

Why is a black Apple laptop $150 more expensive than a white laptop with the same specs? (Chris Frank) On July 1, 2006, Apple announced the price of the company's 13-inch Apple laptop on its website.The traditional white model sells for $1,299.But a black version of the same model costs $1,499.If you take a closer look, you can find that the black model is equipped with an 80G hard drive, which is 20G larger than the standard hard drive of the white model. There seems to be no mystery about the situation: better equipped machines are naturally more expensive.But take a closer look, the white model can also be equipped with an 80G hard drive.How much is the markup?Just fifty dollars.With that, the puzzle emerges.Why is it that the black model costs $150 more than the white model at the same production cost?

Apple's pricing strategy was undoubtedly influenced by the popularity of the black version of the ipod in the fall of 2005.At first, the black iPods cost the same price and had the same specifications as traditional white iPods, but demand for the black models immediately depleted the company's inventory, even though the white models were still in stock.Since the black model is newly released and has its own characteristics, buyers are more willing to book it.With the two priced the same, Apple is putting hot money on the table.By the time the new Apple laptop was introduced in 2006, the company had learned its lesson.It charges more for the black model, but it has a reason to do so.

Is it unfair to charge more for the black model?Like the average cost of providing air travel services, the average cost of producing computers for a computer company also falls sharply with the increase in unit output.This is mainly because the company's research and development costs do not change with changes in output.Therefore, the company can sell some products at a price below the average cost but above the marginal cost, increasing profits.But to insure R&D costs, the company must sell other products at prices above average cost. In a fair world, those users who enjoy the novel features devised by the company's R&D arm the most would bear a substantial portion of the cost.Who are these users?Most of the least price-sensitive buyers are willing to pay a premium for the sleek features of a new model.R&D projects benefit all buyers, but benefit most to those users who are willing to pay more for new features.The high pricing of the black models is a brutal mechanism for identifying such buyers.As long as that threshold works, buyers of the more expensive black models have little room to complain.