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Timing is everything in your purchase by jigordon
June 10, 2008, 9:50 am
Filed under: negotiation, pricing, risk

So it’s no secret than I’m an Apple fan… and they released the new iPhone 3G yesterday. On dozens of message boards across the world, people are actually complaining that they own a 2G iPhone (the original model) and that Apple won’t upgrade them to the 3G for free.

WHAT?!?

Do we expect this kind of treatment in any other area of our lives? Even in the business world where we TRY to get current price paid to apply to future deals, how many times are we actually successful?

The answer, of course, is not many. Why? Well, because a business that sells you something is hopefully selling it to you for the cost of good sold plus a good (but not gouging) margin. To give you a NEW product without further payment eliminates the margin, thus eliminating profit, thus eventually forcing bankruptcy. Not exactly the successful business model taught in school.

We don’t expect it with our homes or other personal property (try taking your computer back to Best Buy/Dell/Apple/etc for a “free upgrade” and see what they say). But somehow, folks expect it with phones.

Maybe its because we feel like we’re not getting the value out of the technology before it’s been upgraded on us. That in the past, there used to be some significant time period before a new version would be released (just like what we see in the software world). But the truth remains that we have the ability to refrain from purchasing at all. Inasmuch as I love new Apple laptops, I only get a new one every 5 years or so. And I try to schedule my purchase so that I feel like I’ve gotten value (by timing it so that I buy the latest one released, I hopefully ensure that a new one isn’t coming out tomorrow).

But I still feel a pang of regret when the new ones come out. The same is true for cars. When do you buy a new car? When should you buy? Well… if you like the best features, the most advanced tech, the latest and greatest… you buy in August/September, when the new model year comes out. If you like the best price and are willing to sacrifice the lastest-and-greatest, guess what, you buy at the end of the same time… September/October, when the new model year comes out and you get the most recent old one at a significant discount.

Live with your purchase decision, though. Plan it well and then cope with it. But don’t expect your vendors to give you a free upgrade if you’re not paying for it (maintenance fees, anyone?). They won’t be around long to support it if they do.


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