In 2013, Google has released a futuristic and stylish cyber-glasses that aims to provide the consumer the most essential and important functions of smartphone in a innovative, hands-free manner. They are also trying to form partnerships with sunglass retailers to provide prescriptions to accommodate consumers with different eye grades. Currently, the Google Glass is not available in the consumer market but only available to a very specific target segment that are willing to pay a premium price. And if you want to get your hands on this new technological advancement, then you’re going have to pay $1500.
In a variety of markets, most commonly in technology markets, there is a very niche market where eager and early adoptors of new technology possess a very high willingness to spend on these products. Big electronic companies like Apple, Microsoft, and Sony are very familiar with this unique pricing strategy called Price Skimming. Specifically, this applies to market segments of consumer who are inclined to pay a premium price to be the first group of consumers to have their hands on this new hardware. To a certain extent, this strategy is very beneficial in the long-run because the people who get it first may have a better knowledge on reviewing new technology and “the $1,500 cost weeds out the potential Google Glass audience so that the only people who will spend the money are those sincerely interested in wearables and mobile technology.”However, at a certain point in time, this niche segment will eventually become saturated and price will go down to capture different segments. When Google eventually prices the Goggle Class lower than the initial price, this may indicate that it is starting to sell it to general consumers with different willingness to spend.
https://www.youtube.com/watch?v=v1uyQZNg2vE
This is a completely new product and is only one-of-a-kind. Making sure it enters the consumer market optimally is crucial to its success and pricing is undoubtly a very important factor.
Sources:
http://gigaom.com/2013/08/08/why-google-glass-costs-1500-now-and-will-likely-be-around-299-later/