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Save $49,000?

- May 22, 2000

What happened to $49,000?

I'm at a loss. Last Monday Apple announced a price cut for a popular web software package.

That in itself is not unusual. Software companies routinely drop prices on software.

Nor is it surprising that Apple dropped the price to extend its presence in the web server market.

What is pretty surprising is that the price drop is $49,000, give or take a few hundred dollars. If the original package had retailed for $150,000, I might not raise an eyebrow. But considering the fact that the software retailed for $50,000, a $49,000 price drop is pretty substantial.

Of course were talking about WebObjects here, and this kind of price drop begs a few questions.

Who set the original price?

Someone seems to have made a major goof here. Maybe there's a decimal out of place or something? Maybe a dart board in the marketing room? What could possibly lead Apple to justify a $50,000 price to begin with? Granted, the price may have been fair, but a price drop of $49,000 makes me wonder if it was worth $50,000 in the first place.

Who set the new price?

Looking at the new price and the old price, I can't really understand how they settled on $699. Why not $30,000? Or $15,000? Or even $5,000. If people bought it at $50,000, they'll really go for it at $5,000. The pricing model seems to be fairly arbitrary.

What about recent customers?

I'm sure that there's some poor guy or gal out there who bought WebObjects two weeks ago at the full price of $50,000. Will Apple give these poor souls a break, like maybe deliver a brand new Mustang to their door? They'd still be $25,000 ahead of the game if they did that, right? And what great PR!

Is Apple now losing money on WebObjects?

Let's be serious for a moment. If $50,000 was a fair price for WebObjects, Apple is taking a very serious loss here. How can it justify this loss? They may want to gain market share but does a loss of this magnitude justify the goal they are trying to achieve?

If they are not taking a huge loss on this software package then it's clear that the software was not fairly priced to begin with. Is it appropriate for Apple to set such a price on a software product? Is it fair for Apple to take early adopters for a ride and then implement a huge price drop?

Which is it, a huge loss or an unfair price?

I'd sure like to know.

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