How Do Electronics Prices Get Determined

[Smokes]

I just seen that a PS 2 was 299$ at release back in 2000 and a PS 4 was released at 399$ back in 2014. So the price of a system rose 100$ in almost 15 yrs. Does that sound like avg inflation or lower than.

Cause they say tech is cheaper and cheaper, so should new technology be cheaper than old ones. Like a new Iphone should be cheaper cause they got better processing plants and can make the phones cheaper, but they dont. How come?


@Madmick

 

[Rygu]

Same thing with video cards.

When I bought my Geforce 580 3GB back in the day probably 2011ish for $800 it was the best card at the time. Now the best is the 2080ti and that's like $1800

 

[fordman7795]

Prices are usually determined by ‘at what price point do we make the most profit?’

Say for example the ps4 cost $100 to make and they sold it for $400. At $400 they expect to sell 1 million units for a total profit of $300,000,000. If the price had been $1000 they’d only sell 50,000 units and profit $45,000,000. Someone at Sony ran the numbers and came up with the price. Same with the iPhone.

 

[Smokes]

Same thing with video cards.

When I bought my Geforce 580 3GB back in the day probably 2011ish for $800 it was the best card at the time. Now the best is the 2080ti and that's like $1800

I think the Crypto Minning craze got the cards to skyrocket for a bit but now are dying down i think. I hope they do cause I want another 1080 FTW and cant seem to find one under 500$

 

[Smokes]

Prices are usually determined by ‘at what price point do we make the most profit?’

Ok but if the price of Making the product was to go down, then shouldnt the price of the product go down too. A profit was being made at the higher price of production, so in the profit lvl was to stay the same then the price of the product should go down.

They say they fine cheaper and more effectively way to make things all the time but has any new tech ever go down in price at release or before it become old tech.

 

[fordman7795]

Ok but if the price of Making the product was to go down, then shouldnt the price of the product go down too. A profit was being made at the higher price of production, so in the profit lvl was to stay the same then the price of the product should go down.

They say they fine cheaper and more effectively way to make things all the time but has any new tech ever go down in price at release or before it become old tech.

The price would only go down if: demand went down or competition went up. There is no obligation to lower the price because manufacturing costs go down. Businesses are in business to make maximum profit.

 

[nostradumbass]

By what people are willing and able to pay if there's only 1 company making something.

 

[superpunch]

A car made to like 1970s specs would cost $2000 new today. They still make them. They sell them in 3rd world countries. A modern car might be $15,000 but it has ABS, power steering, airbags, computers, a radio, speakers, engineered to safety rating, gets 40 miles/ gallon, etc etc etc. All that stuff costs money.

Same for electronics. Compare a PS2 to a PS4. A PS4 has a modem. A PS4 has wireless controllers. Etc etc. All that costs money.

IF they made a PS4 at PS2 quality, even with upgraded hardware like CPUs, graphics card, etc. it'd cost like $100. Not just in performance, but you're getting so much more at the same price point and consumers have decided they'd rather have all that at the $400 price point than less at a cheaper one.

 

[Smokes]

here is what I am thinking. Not 100% correct you get it.

PS4 get released at 399$, 2 yrs laters PS4 Slim gets released at 299$, and than 1 yr later PS4 Pro gets released at 399$.

Not correct but lets say it is.

The learned how to save money with the PS Slim cause it smaller, cheaper and they building them for awhile, they know what they doing.

So then the ADD some stuff to "justify" the price of the PS4 Pro.

But this is still basically a 4 yr system that they been building the same way. The adding wasnt really a change in design but a upgrade. So shouldnt they be able to make them at a lower cost by now and sell them too?

But someone already said Maximum Profits is what the go for

 

[Headkicktoleg]

Prices are usually determined by ‘at what price point do we make the most profit?’

Say for example the ps4 cost $100 to make and they sold it for $400. At $400 they expect to sell 1 million units for a total profit of $300,000,000. If the price had been $1000 they’d only sell 50,000 units and profit $45,000,000. Someone at Sony ran the numbers and came up with the price. Same with the iPhone.

This. It's called price elasticity and it's one of the main principals of branding/economics

 

[Deleted member 220895]

 

[JudoThrowFiasco]

Prices are set by a multitude of reasons but it comes down to 3 basics, how much does the product cost, how much does the business need to break even, how much will people be willing to pay for it

 

[ToxicShocker]

This. It's called price elasticity and it's one of the main principals of branding/economics

 

[bosox32]

here is what I am thinking. Not 100% correct you get it.

PS4 get released at 399$, 2 yrs laters PS4 Slim gets released at 299$, and than 1 yr later PS4 Pro gets released at 399$.

Not correct but lets say it is.

The learned how to save money with the PS Slim cause it smaller, cheaper and they building them for awhile, they know what they doing.

So then the ADD some stuff to "justify" the price of the PS4 Pro.

But this is still basically a 4 yr system that they been building the same way. The adding wasnt really a change in design but a upgrade. So shouldnt they be able to make them at a lower cost by now and sell them too?

But someone already said Maximum Profits is what the go for

Everything in the world of business is done to maximize profit in one way or another.

 

[TankAbbott4Eva]

Prices are usually determined by ‘at what price point do we make the most profit?’

Say for example the ps4 cost $100 to make and they sold it for $400. At $400 they expect to sell 1 million units for a total profit of $300,000,000. If the price had been $1000 they’d only sell 50,000 units and profit $45,000,000. Someone at Sony ran the numbers and came up with the price. Same with the iPhone.

Correct. I have been responsible for pricing tech products in my time, it was a mature market so to compete we had to price relative to a major competitor but 10% under being a new entrant. But we could discount heavily when required, and I never got to find out how much they actually took to make. For good reason too, I'm sure the factory were making an absolute cuntload of margin.

 

[fordman7795]

Correct. I have been responsible for pricing tech products in my time, it was a mature market so to compete we had to price relative to a major competitor but 10% under being a new entrant. But we could discount heavily when required, and I never got to find out how much they actually took to make. For good reason too, I'm sure the factory were making an absolute cuntload of margin.

I find it strange that the person responsible for end pricing isn’t told the actual cost.

 

[Plutoburn]

 

[Organic Damage]

Are those prices in OP inflation adjusted? I think the fact purchasing power has been diminishing for decades as real wages stagnate might have something to do with it as well (though obviously it's not just electronic items)

 

[minute bull]

Dartboards.