Apple Takes out Cross Subsidies in Phones
January 29th, 2007 by 
Administrator
This is a good take on how cross subsidies can affect pricing, and also consumer choices, and how it can distort prices.
Apple’s iPhone Pricing: What You See Is What You Get: Financial News - Yahoo! Finance
Why would Apple do this? Because they don’t want to have to sell a video iPod without phone features for more than an iPhone. This strategy means that consumers would buy shiny iPhone touch-screen goodness in a music-and-video-only player for price points of $399, $349, $299, and $249 without feeling like they’re paying more for less.
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