Give away the razor handles, make money on the razor blades. That was received wisdom in business for much of the 20th century: If you hook your customers with a free or very cheap product below cost, you can charge a lot more for the necessary add-ons to that product
Videogame companies have been doing exactly that for years: sell the consoles for less than what they cost to manufacture, then offer games for $50 a pop. The whole PC ecosystem was arranged this way: laptops and desktops were as cheap as you could make them, while users spent the big bucks on their Windows, Office and other software licenses. Read more…
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Read more : Apple’s Backwards Business Model Upends Everything We Know
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