The First Apple IPhone Was Introduced in 2007 at an Initial

question 38

Multiple Choice

The first Apple iPhone was introduced in 2007 at an initial price of $600. People waited in line overnight so they could be one of the first to own this unique smartphone. Which pricing strategy did Apple use to help recoup its costs for developing the smartphone?

• A) penetration pricing
• B) experience-curve pricing
• C) customary pricing
• D) skimming pricing
• E) target pricing

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Definitions:

Long-Term Investments

Investments made by a company in bonds, stocks, or other financial assets, intended to be held for a period longer than a year.

Debt Investments-AFS

Available-for-sale debt investments represent debt securities that a company intends to hold for a period of time but may sell before maturity for capital management reasons.

Loss on Sale

The financial loss realized when the selling price of an asset is less than its carrying value on the balance sheet.

Available-For-Sale Securities

Debt or equity securities not classified as held-to-maturity or trading securities, and are purchased with the intention of selling before they mature.