Very intelligent response. Natural economics at play. The 'cheaper' device is a gateway product to further upsells. Whereas the pants are fungible and isn't much of a gateway to upsells.
Quote:
Originally Posted by kane
It is simple business.
You will pay $60 for a pair of workout pants and you will have them for a long time. Months at the very least, perhaps even years. So you could assume you will only buy a few pair a year.
The Blackberry only costs $199 and you love the price and think it is a great deal. Then you plunk down $100 a month for the service.
3 pair of workout pants per year - round $180
Blackberry plus 1 year of service - around $1400
It is just like getting Direct TV. They will give you the dish and the DVR and receiver for free as long as you sign an agreement that you will buy their service for at least 1 full year.
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