Sunday, November 07, 2010

Markups on Apple Cables

My iPhone 4 does this annoying thing: Despite being almost fully charged, it turns off and can't be turned on again unless I connect it to iTunes.

It happened again yesterday while I was wondering around downtown San Francisco. I had my MacBook with me, but no cable. Thinking that an iPhone cable can't cost more than $4.95, I walked into the Apple Store on Market Street. Hello, sticker shock: iPhone cables cost $19.00.

Amazon, on the other hand, has off-label iPhone cables for $1.25. Likely not as nice as the original. Still, I can't imagine the original cables cost much more make and ship than the retail price of the cheapo cables. Somewhere along the way, Apple seems to create enough value for a whopping 1520% percent markup.

Cables, coffee, greeting cards. The holy trinity of high margins. If only I could create a retail store that sells only these three items.

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"If you try to argue Starbucks pricing by talking about costs you don't get basic economics." -- Chris Dixon

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