Internet music leader Apple Inc. (NASDAQ: AAPL) has abandoned its one-size-fits-all pricing models for music downloads at the iTunes media store. The company, which announced the move in January, has gone to a three-tier pricing model for all its song downloads: 69 cents, 99 cents and the new $1.29.Just as Apple announced its pricing move, competitor Amazon.com (NASDAQ: AMZN) also announced $1.29 music downloads. The move by Apple was expected, as the music studios it partners with have always wanted more control over the 99-cent pricing model that was introduced when iTunes went live years ago. It's the age-old model: set pricing low to stimulate interest and build your consumer base, then revisit pricing once it won't be hurtful to the business model.
At the same time, Apple's abandonment of digital piracy (known as DRM) probably worries music executives, but further empowers customers to take their downloaded music anywhere on any device that supports the AAC standard. So, by jacking up many of its prices, at least Apple has given its customers flexibility to use their music anywhere on hundreds of devices -- iPod or not. Steve Jobs was right on this one. The market agrees, having sent AAPL shares from below $80 back in January to above $116 as of this morning.
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Reader Comments (Page 1 of 1)
4-08-2009 @ 3:01PM
Brian said...
Apple may face stagnation in coming days. Steve Jobs' poor health is expected to hurt the company.
For more check out
http://www.stockozone.com/2009/04/apple-iphone-is-doomed-to-fail-in-china.html
5-01-2009 @ 8:53PM
hi said...
"Apple's abandonment of digital piracy (known as DRM)"
LOL I think you mean "digital piracy prevention"