Network Effects of Drop in Prices of Black Friday Apple Products
Article: Apple Watch styles drop to $169 (record low prices); AirPods fall to $139 at Amazon
With Black Friday coming up next week, Amazon has been dropping the price of Apple Watches and Apple AirPods to a new record low price. The prices are dropping as low as $170 for an Apple Watch and the discounts range from $30 to $350.
Everyone has their own reservation price for Apple products. Some people find the products extremely expensive for their value, while others find the prices moderate. The upcoming sale on Black Friday will increase the sales of these Apple products on Amazon immensely. When looking at a f(z)r(x) curve, by lowering the price of the good, the fraction of buyers that will purchase the good increases. By lowering the price of the products, people who had a lower reservation price will buy it (give the new price is below or at their reservation price), as well as the other people who already had a reservation price at or above it. This is a great tactic for Amazon to sell a lot of Apple products given the price drop. Also, recognizing that the price drop is only for one given day, they won’t be permanently decreasing their price and will raise it up to the original price after.