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Sony and Apple to profit from correcting launch price 'mistakes' on PS3 and iPhone

Price cuts on two iconic electronic products signal defeat for big brands that believed the latest technology can find a mass market at any price – but if the consequent rebound in iPhone and PlayStation 3 sales and profits is large, some traditional wisdoms on price strategy may need to be rewritten.

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financeweek.co.uk
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rev203426d ago

Interesting article, i agree that sony didnt want to launch the ps3 so early you can obviously tell that by the state of things atm, although they are improving with time.

With the looks of it by selling their shares they have the money to cover a nice price cut around the world and this is exactly what sony needs if they can get the price down to close or matching the elite, then they can really start making ground

eagle213426d ago (Edited 3426d ago )

Consumers crave affordable products with innovation. I myself own a PS3, would love an Iphone at the right price. They are great innovations! Sony and Apple would never want people to not use these innovations, I am sure they are working around the clock to reduce prices. Apple made a profit off Iphones from day one, Sony lost money, but the media ripped Sony. But to Sony it's like street cred to a pop star. After two generations of home consoles, 220 million sold, they needed this "tough love", makes comebacks better. Sony will return!

Cat3426d ago

after massive success, "sony fails" is a much better story than "sony succeeds again!"

DEADEND3426d ago

Well I know by Q2 08 the PS3 will cost $400 once this happens the PS3 will be around the same price as the XBOX 360 ELITE. But the PS3 won't start beating the 360 until holiday 08 when the PS3 drop to $350 to $300 and then you'll start seeing things evening out for SONY and MS.

KingJames19063426d ago

I personally do not agree with much this guy is saying. The market does not react kindly to corporations that OVER PRICE THEIR PRODUCTS and then change 2 months into its lifecycle. Steve Ballmer CEO of Microsoft was right http://www.youtube.com/watc... (and I hate to admit it as I’m an iPhone owner.)

Apple over priced the iPhone. I didn’t mind as I could afford one, but this article stating that Apple and Sony will be rewarded by the market for price corrections is crazy. As of this writing Apple stock is down nearly 5 dollars two days after an Apple product announcement. This by the way has never happened to Apple since the introduction of the iPod back in 2001. The issue here as always is PRICE. At least Apple tried to correct its error by offering all previous iPhone owners before the price cut $100.00 dollar certificates (I plan to use mine to by my wife an 8 GIG iPhone so $299.99 for me :) Sony hasn’t done this with the PS3. Actually Sony never lowered the price in North America; they only honored the 2 SKU they originally promised at E3 2005. But, then admitted that the 100.00 dollar price cut was really a fire sale for 60 GIG PS3’s (discontinued 60 GIG PS3’s) which I think Sony should step up to the plate and offer a 50 dollar gift certificate or at least Heavenly Sword as a we messed up consolation prize to previous North America PS3 owners.

Cat3426d ago (Edited 3426d ago )

Sony and Apple didn't price their products counting on consumers' deep affection to overcome the price tag. They priced at what they had to price to reduce losses/maintain profit. Technology advances and things become cheaper to produce very rapidly - the infamous blue diode, for example. The PS2 price drop over time didn't occur because they needed to move product, it happens because it's cheaper to manufacture. Same for the iPhone. Did anyone see the lines for the iPhone? PS3? People were ready to pay, now they just have to pay less. People will continue to buy PS3's and iPhones, not because of the price drop, but because they WANT them. For Sony/Nintendo/MS, money is made from game sales (hopefully) which allows systems to be sold at a loss.

Apple and Sony's response to consumer outrage over price cuts is generous, good PR, but by no means necessary. As The Steve stated, this is technology. Things change, and if you don't buy something because you're waiting for the next price cut, you may never buy anything at all. That said, I haven't snagged an iPhone because I'm waiting for the iPhone nano. ;)

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