The trick is to turn a less luxurious good into a luxury good.

Which is rather like what they did.

Cars are an area where this is really common. BMW doesn't bring their lower end stuff into the US. Toyota created Lexus to be a luxury brand.

Or there's the pricier sorts of bottled water...

Or "super-premium" vodka. That's an entire product that didn't even exist until someone decided to create it, largely as a way for people to demonstrate to others that they're well-off enough to purchase super-premium vodka.

If you can get yourself into a "value through market position" opportunity early on, it seems like a license to print money.

There are even weirder examples of this in the alcohol market. Jeroboam and methuselah bottles of champagne are easily 200-400% more expensive than the equivalent amount of alcohol packaged in normal-sized bottles. I always found this amusing, like a tax on ostentatiousness.

In China, there's a version of PBR that costs $44 per bottle.

Check out the Nike Air Force 1 High Premium iD Shoe. $200 a pair.

"It's a limited-time opportunity to create an inconceivably rare sneaker. Each month, Nike is releasing a new, exclusive material option for the Nike Air Force 1 High Premium iD. A limited number of pairs is available to customize each month, so get one while you can."

They've done this with their in-market shoes where they go for $200-$300 a pair depending on the makeup.

I'd say that $200 is approximately the right markup compared to the regular price of an Air Force considering what's required for individual customization. I do note that the price of a shoe may be high to begin with.

That being said, they've stepped it up beyond your example and gone with "Bespoke" options for their shoes. $800 a pair.

> Or there's the pricier sorts of bottled water...

Tell me about it. On my honeymoon in Maui I accidentally spent $9 on a bottle of water at Ferraro's.

It was "complementary" with an "e"...

Lobster is exactly the same thing. Up until the mid-19th century, it was low class food - something only the very poor would eat. Now it's served with steak.

That's partly because they were overfished to near the point of extinction since they were so cheap (early last century a bucket of lobsters costs a dollar).

How about the iPhone? Many 'imitations' yet people who don't really know any better by the Apple product. "I don't want a fake" is very likely the reason.

In that case, though, the UI and details actually create a different user experience. As a professional software engineer, I like to think that I "know better" on various criteria.

I've used Android phones and while they are fine enough, the UI feels a little 'off' and the responsiveness is lower. It's enough to make a real, subjective difference.

The point is, most consumer buy without knowing any of that, or even trying the phone out.

I'm sure there's a lot of following the herd.

I like to think that I got an iPhone after carefully considering all the alternatives and making an informed technical analysis because I am a unique individual and I would never follow the herd or copy other peoples' actions. (At least that's what I tell myself.)

You think (based on nothing) that "most" consumers have never tried an iPhone?

You might want to think different (sic) about that for a moment, given that there are hundreds of millions of iOS devices out there in use right now.

Virtually everyone who can afford an iPhone either has one already, or has at least tried one out a bit.

YOu could try to claim 400M. But each quarter, half the sales are upgrades. So maybe, what, 100M? Which is 1/4 of America. But all the sales aren't America.

Maybe 25% market penetration? Not small potatoes, but still, Most people haven't bought one.

Their products are Veblen goods, economically speaking.