RUSH: The iPhone X was released for pre-order at a minute after midnight Pacific time. And after two or three minutes if you didn’t get your order in the soonest you’re gonna one delivered is five, six weeks. So I’ve got these iPhone 8 Pluses here, and, I figure, I’m gonna start giving some of them away, because, even if you’re waiting on a X and you happen to get through here, you should accept the offer of the 8 Plus. It’s free, and you can use it until your X arrives if you’ve ordered one. If not, see what you think about it.
In fact, I have a theory. Do you all know what decoy pricing is? Steven here just mentioned capitalism, and capitalism has many, many, many brilliant aspects. And one of those brilliant aspects in the hands of people that know what they’re doing is pricing. And I think that the iPhone 8 and 8 Plus are decoys this year. Let me explain it with a different subject than phones. Let’s take a magazine that offers a print edition and an online edition. So there’s two different ways that you can have this magazine, but they offer three prices.
The first price, $59 for print edition only. The second price, $159 for the print edition and the Web version. And the third price is $159, same price, for only the Web version. So you’ve got two prices and three products. So your question is, what are they really trying to sell here? They’re trying to sell a combo print and Web, but how do they make that price look effective? Very simple. $59 for the print only, $159 for the Web only, or $159 for the print and Web.
What are you gonna choose? The odds are you’re gonna choose the Web because you think you’re getting a deal. By having the Web only version priced the same as the print and the Web, the psychology is you’re gonna take the price that gets you both of them, because you think you’re saving big, so the decoy in those three is the Web version only at $159.
And my theory is that the iPhone 8 and 8 Plus are the decoys and that what Apple is actually trying to do sell is more iPhone 7s and iPhone Xs, ’cause they know they’re gonna sell the X. And I think I’m right because early analytical data suggests that the iPhone 7 is outselling the iPhone 8. Now, the tech media is a bunch of idiots and doesn’t understand what I just told you, so they’re looking at the iPhone 8 as an abject failure. It had no chance up against the iPhone X. The iPhone 8 had no chance the way it was priced. The iPhone 7, if you don’t want to spend a thousand dollars on the X, you’re gonna go to the 7. It’s exactly what’s happening.
The iPhone 8 is the decoy. And they’re selling the hell out of iPhone 7s that are a year old because of the price differential between that and the X. Now, here’s what is gonna happen next. As the supply-demand equilibrium gets into gear, we get to the point where you can walk in an Apple store and buy an iPhone X ’cause they got enough of them in stock, you don’t have to wait five or six weeks to get one. At that point the iPhone 8 is gonna start moving off the shelves, because the iPhone 8 is going to be the next best thing you can get, if you can’t afford or don’t want to spend a thousand dollars on a X.
Anyway, I gotta take a break. Or you might say the decoy is the $159 Web-only price, but with two products and three prices, one of them is a decoy. It’s the same thing here with the iPhone X and the iPhone 8. The 7 is what people who don’t want the X are gonna buy ’cause it’s so much cheaper than it was last year, and the word is the 8’s not that much better, even though it really is. But you notice Apple’s not promoting the 8. Not yet. They want to sell the 7’s. They got a bunch of them made. They’re in inventory. It’s brilliant stuff.
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