Why iPhone X thinks it is worth $1200

Apple has once again broken the internet when it released the iPhone 8 and the iPhone X. The latter quickly stood out; one of the reasons was its eye-watering price. This could be one of the most expensive commercially produced phones ever, with a price tag of around $1,200 (US$1,000), but Apple CEO Tim Cook thinks the said device is worth every cent.

Appearing in "Good Morning America," Cook stated that the hefty price tag is a “value price” for the technology the iPhone X offers. The comment came in response to a question submitted by a viewer asking if Cook somehow thought that the price is way out of reach for the average American. The CEO's answer dodges the case at hand, but zooms in on the fact that not a lot of people actually buy their phones for what they really offer.

CNBC reports that although the iPhone X is the most expensive phone from Apple, a lot of consumers are puzzled as to why it was released at $999 instead of $1,000. This is because there's something about a price that ends with a nine, or a 99, that pulls customers to think they are getting a deal.

In a study from the Rutgers School of Business, it was said that consumers perceive prices that end with a 9 as a cue that they are getting a lower price than expected. Other research suggest that odd number pricing that falls below a full dollar creates an illusion that the item is cheaper than it actually is.