# The Internet Ripped Appl...  ## Metadata - Author: [[@TrungTPhan on Twitter]] - Full Title: The Internet Ripped Appl... - Category: #tweets - URL: https://twitter.com/TrungTPhan/status/1464998538752843776 ## Highlights - The internet ripped Apple for its $19 polishing cloth. But, it's sold out with a months-long backlog. Based on Apple's pricing psychology, the $19 price tag *actually* makes sense. Here’s a breakdown 🧵  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998538752843776)) - 1/ Apple’s pricing strategy is all about the number “9”. In fact, the starting price for all Apple products end in the number "9". All of them. This is def not a coincidence.  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998542347411457)) - 2/ One of the most well-established phenomenons in pricing psychology is the "Odd Pricing Effect". Prices ending in "9" -- from cheap to expensive products -- signal a deal and drive more consumer demand as compared to a whole round number.  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998546617225228)) - 3/ "Odd Pricing" relates to another psychological effect called "Left-Digit Bias". People read numbers from left-to-right and are anchored to the first digit. Result: when evaluating prices, we overweight the first digit and changes to that number drive the perception of value.  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998549691662342)) - 4/ In one famous MIT and U of Chicago study, researchers priced a women's item of clothing at $34, $39 and $44. The $39-price level ("9") sold the most, even as it was more expensive than $34. The result demonstrates the power of the "Odd Pricing" / "Left Digit" effects.  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998552820613121)) - 5/ Back to Apple We know the cloth's price will end in "9". But, Apple also has to signal a premium position in the market. It does so with high prices. Few have the company's pricing power (to wit: Apple captures 60% of smartphone profits while selling only ~15% of handsets).  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998556377370628)) - 6/ So, what are Apple's options to price the cloth? $9? $19? $29? The first option ($9) is too low. You can buy polishing cloths on Amazon for under $10 and Apple needs to stay "premium". $29 (or above) is moving into a different tier. That leaves $19.  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998559837679616)) - 7/ As it turns out, Apple prices a lot of its commodity accessories at $19. ✔️ USB-C charging cables ✔️ Earphones with cord ✔️ Power adapters Clearly, $19 is the sweet spot for Apple's customer base. (And when you're buying 4-figure electronics, doesn't really move the needle)  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998563167965191)) - 8/ Based on Apple's pricing and brand positioning strategy, the $19 price tag for the polishing cloth is actually a logical choice. Having said that, the jokes are hilarious:  ([View Tweet](https://twitter.com/TrungTPhan/status/1464998566527582209)) - 9/ If you enjoyed that, follow @TrungTPhan for other business threads 1-2x a week. Here's another one you might like: https://t.co/49u4efaPb9 ([View Tweet](https://twitter.com/TrungTPhan/status/1464998568326950917)) - 10/ I also do a weekly round-up of hilarious memes and tweets. Here are a bunch for the $19 cloth: https://t.co/nvfwB1t1Rn ([View Tweet](https://twitter.com/TrungTPhan/status/1464998569882963971)) - 11/ Sources Odd Price (Buynomics): https://t.co/9sNHN7oV11. Entrepreneur on MIT/UofChi study: https://t.co/D3lQos4pum CNBC: https://t.co/P7GcL8rLG5 Main article here from WSJ (great read): https://t.co/kMCuKZkPsm ([View Tweet](https://twitter.com/TrungTPhan/status/1464998571116138497)) - 12/ Don't forget one of Apple's OG "Odd Price" power move: iTunes $0.99 songs. Steve Jobs even used the classic "one cup of coffee a day" comparison in pitching the iTune's value: https://t.co/rL525qaIkR ([View Tweet](https://twitter.com/TrungTPhan/status/1464999378305703940)) - 13/ Apple Car def gonna be priced at $999,999 https://t.co/zkQRyswZwR ([View Tweet](https://twitter.com/TrungTPhan/status/1465005896220622851))