There used to be a time when Apple charged for iPod engraving. Nowadays, Apple is kind enough to offer free laser engraving on all iPods and iPads. So what gives? Sure, free engraving is a great way to give consumers a tiny extra bang for their buck, but could there be a monetary reason behind Apple’s random act kindness?
Eli Dourado seems to think so and he makes a convincing point:
The real reason Apple offers free engraving is to weaken the secondary market. iP*ds are durable goods. Apple has a monopoly on iP*ds, but it still has to compete with the products of its former self. If people get tired of their iP*ds or decide they want to upgrade to a newer model, they can sell their devices to other consumers, who in turn are not giving their money to Apple. By offering free engraving, Apple makes these used devices less valuable to other consumers. Who wants a weird engraving chosen by the previous owner on his iP*d? The more iP*ds are engraved, the smaller (or at least less valuable) the secondary market is, and the more profitable it is to be the durable-goods monopolist, Apple.
Food for thought.
November 29th, 2010 at 4:25 pm
I think there is some truth to what is being said, but hardly enough to matter. I’d be keeping my iP*d in some case, so I’d probably never even see the engraving except once or twice. Couldn’t a person just sand the engraving away with a Dremel or something. There’s even aluminum filler that could be used. Ah, who cares, the product works, you got it for less money and it really doesn’t matter anyway what the engraving says. There are always ways to make Apple appear as a devious company.
Aren’t most rings or bracelets engraved? Does it really greatly diminish the market value for gold or silver items?
November 29th, 2010 at 5:57 pm
This idea (free engraving) is the classic “win-win” approach. The engraving makes the object a better gift (it expresses a personal touch, which adds value to both the giver and the receiver) while making the object less generic. It is used by others and one should really give Apple credit for applying it to iP*d gifts.
November 30th, 2010 at 1:58 pm
It was a good point until the word “monopolist” was used.