The way successful businesses price products and services always interests me, this is from the Wall Street Journal via Charles Arthur’s Overspill
Analysts say $19 is also a sweet spot for well-to-do consumers willing to pay extra for basic tech products and services. “When you go below $20, those people don’t think twice about it, even if [the item] could be competitively priced at $1,” said Gene Munster, managing partner at venture-capital firm Loup Ventures.
The cost is also low enough to be an aspirational purchase for shoppers seeking products that make them feel special.
“Apple wants to make sure that their consumers constantly feel nice,” said Abir Syed, partner at e-commerce consulting firm UpCounting. Even if shoppers aren’t getting a good deal, he said, “they just feel fancy.”
But there’s a catch. Selling cables, adapters and polishing cloths far below $20 might put them in “cheap” territory. A lot of Apple’s success is based on its products’ positioning as an attainable luxury, something that costs a bit more but is justifiably worth it.
“At $19, you get the charm-pricing benefits [of a price ending in ‘9’], but it also sends the signal that this is a premium product,” Mr. Syed said.
Much of this pricing depends on where shoppers are doing their shopping. If you’re on Apple’s website or in an Apple store, you’re not bargain hunting the way you might be if you were shopping for a specific item on Amazon or at Walmart.
“A vast majority of people would say $20 is absurd for a dust cloth on Amazon,” Mr. Syed said. “At Apple, there’s a bit less of a comparison happening.”
In the case of Apple’s polishing cloth, selling it at $19 creates more demand than pricing it at $9, experts say. The $19 cloth became an internet meme shortly after Apple introduced it, which might help explain its hard-to-get status. And you likely won’t be paying less for it soon.