Response to Tim Manners article in FastCompany
http://www.fastcompany.com/resources/marketing/manners/right-by-radiohead-101507.html
"Radiohead is Earning Customer Loyalty while Apple is Spending It"

Can't see this pricing approach evolving from exception to rule, but its simultaneous likability and marketing feedback opportunity are pretty intriguing.

For music, coffee, and software the cost of producing a single unit for sale is very low, and far below the conventional market value, so there's a considerable buffer against the problem of selling below cost. For manufactured items it's a different story.

Although you could turn cellphones, mp3 players or both into a nearly-free commodity item like watches and calculators, that's not Apple's particular business. Selling cool and innovative products requires some level of valuation at least bordering on expensive.

In this sphere cutting prices is ordinarily a good way to stimulate sales (as Jobs said "get iPhones in more people's hands" because they're selling functionality rather than objects). The rapid democratization of the object had the same effect as it does in political spheres: the former "privileged elite" rightfully feel undermined, because whatever advantage they had enjoyed is now publicly devalued. In view of the comparison made in this story, Apple initially spent good will by publicly reminding early adopters that not waiting had cost them hundreds of dollars.

Radiohead hypothetically could have done the same thing by abruptly changing from a free or voluntary pricing model to an supplier-imposed one. Recall the Grateful Dead's short-lived attempt to remove free recordings from Archive.org.

Our assumption is that a business suffers when it angers prospective purchasers. Still, I don't know that there's much of an alternative for Apple but to handle the worst complainers individually, let time heal wounds for the rest of us and go back to making more cool stuff.

Re: the coffee shop: Posting price history would help those customers uncomfortable with the participatory obligation of setting one's own price. Maybe not all price history, but at least the last day's or week's purchases would add some positive feedback and richness of experience.

Now that I think of it again there are plenty of retail economies where negotiating price is the norm. That's a step or two beyond this topic however.

Interesting to think about what part of these economies is played by good will, trust, and assumptions we make about trading partners.