Ever wonder why the iPhone is so expensive? This might be the explanation

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WHO AM I?
Hello 👋 I’m Humphrey, I used to be a financial advisor, worked in gaming/tech, and started my own eCommerce business. I make practical, rational content on investing, personal finance, the news, and much more with a data-backed approach. My goal is to help you with financial literacy and creating wealth.

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[realshadowlord]

The best razor-and-blade example is Gaming consoles. Most of them are loss leaders, when the real profit comes from controllers, accessories, and ganes

[Kwijiboi]

Reverse makes sense because a lot of people had lots of pirated music, or deep physical collections that they could rip for the ipod. Selling hardware at a high price allowed them to make a lot of money and stay above water without relying on iTunes store sales.

Now, most music is digital, but it wasn't the case when the iPod was released.

[jorjoperalta]

I remember feeling ripped off at $1/song

[sloppynyuszi]

The iPod came out in 2001 and paying for music online maybe was a thing by 2010 or something. When the iPod was new even if you ignore the piracy that was more of the norm. More people were ripping their own CD collection to MP3s and putting those on their iPods instead of buying a file online. When a $20 album had 15 songs or many albums were on special for $10, 99 cents for a file you can find for free seemed expensive.

[jzimmt]

Apple doesn't sell songs.
My wife recently discovered the hard way that the thousand$ she spent over the years "buying" songs, in reality she was only buying access to a file. Apple recently blocked her out of her access and then offered a monthly subscription to icloud where she could re-access her files. She was under the impression that she owned the song but in reality only bought temporary access. What a blow!
F apple

[gabrielfair]

The reason why they were forced to use this model was b/c they were competing with the popularity of getting songs for free at the time. So they had to price low for convience of having your songs sorted and organized

[Stepbrohelp]

I think the best example of this is Costco. You have to pay for the membership fee, but once you’re in, the deals you get there are so much better than almost anywhere else.

[BenjaminKibbey]

Missing from how they ensured those massive margins is the story of Winamp and multiple other well-loved music programs that Jobs cut off all at once, refusing to permit developers to continue to create any form of music organization or playing software for Apple computers.

The whole thing was brutal, ruthless, and without warning or mercy, a phrase that could be the title of a Jobs biography.

His ultimate plan, which was only foiled by advancements in streaming and services such as Spotify and Google Music, was a world in which everyone was pretty much locked-in to an iTunes/iPod and eventually iPhone ecosystem.

Thank god, like most megalomaniacs, he was only initially and partially successful.

[upgrader]

it was revolutionary to actually pay for an MP3... We had been getting those for free for matey

[stephenspackman]

That makes little sense. They were charing a dollar a track for songs that you would normally buy on an album for roughly $12 for about 12 tracks. So … that was market price, except that you didn't even get the album, and Apple didn't have to pay to produce, warehouse, ship or sell the album.

Seems to me they were still charging for blades.

Or did I remember wrong?

[aviefern]

The worst example of the razor-blade model seems to be diabetic testing equipment. Glucometers are so cheap and many doctors give them away free. I have 3 sitting in my drawer. The testing strips are expensive as heck though.

[phuturephunk]

I like the fact that the person transferring songs listened to The Propellarheads. Sweet.

[ghost-chili]

Was not expecting to see Pink Guy on there

[w]

I remember my iPod Nano
I still have it and it still works
SO MUCH MUSIC I nearly forgot about and some songs I can’t find on YouTube anymore (I ripped them via YouTube to mp3 back in the day)
I only use an iPhone because of how much music my iTunes library had. Easily a grand. I got my iPhone for the music. Half my storage is still music. I also still buy my music on iTunes because I don’t stream. I’ll only stream music on YouTube because YouTube has bandages you can’t find anywhere else

[Bandboxxer-vn]

The turntable, vinyl album and amplifier business model worked well for a while.

[DoubleBob]

This works especially well cause Ipods were considered a status symbol. You don't get the same swag for flashing your razor.

[haroldpierson]

Sunny already had an appliance.
And we all enjoyed music listened, and movies watched

[mattiaselisson]

I doubt they have 35% margin for all the non accessories they sell.

Like the cloth

[ShojoBakunyu]

The iPod was advertised as one price then they neglected to specify how much storage you had. So I bought an MP3 competitor and a 64mb micro SD card for each person or use and I had hours and hours of podcasts on one and 24 hours of road trip mix on another.

I bought a player for $50 and an ad card for $8 then downloaded any MP3 I wanted.

[Megastar]

ive never really heard of it being called a razer blade model, only a printer ink model