Macworld Expo: The iPhone 'price is right'

Apple exec explains, and justifies, pricing behind the iPhone.
Karen Haslam
Apple has been criticized for its pricing of the iPhone – expected to be $499 for the 4GB version and $599 for the 8GB version. However, Apple believes that the criticism is unfounded, referring back to the initial reception of the iPod back in 2001, which was at the time considered highly priced.
“It’s similar to what we went through when we introduced the iPod five years ago,” said Apple vice president of worldwide iPod marketing Greg Joswiak. “A lot of people compared the original iPod to CD players that cost $49, and asked ‘Why would somebody pay hundreds of dollars for a music player?’ Well, the reality is we are going to sell our hundred millionth iPod this year, and we have never had to price it at $49.”

The reason for the success of the iPod, according to Joswiak is the fact that it offered great value. “The ideal is that if you provide more value to a customer then you are going to get that customer, but it’s got to be the right value.” This is where phone manufacturers are going wrong, surmised Joswiak: “Unfortunately most phones haven’t had much to compete on today other than price.”
This is one in a series of five articles featuring comment from Apple about the iPhone. Read more here:
Macworld Expo: The iPhone 'price is right'
Macworld Expo: Optomised OS X sits on 'versatile' flash
Macworld Expo: No 3rd party iPhone software
Macworld Expo: Everyone wants a piece of the iPhone
Macworld Expo: 3G future for iPhone

http://www.macworld.co.uk/ipod-itunes/news/index.cfm?newsid=16928&pagtype=allchandate