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Comment by sillysaurus3 | Hacker News Reader

What's a halo product?

A halo product is something that isn't there to be the real flagship that's driving the revenue, but instead to be the ultra-cool item that people really lust after, associate that with the brand, then buy one of the lower end models.

For example, the Ford Shelby GT500 http://www.ford.com/cars/mustang/trim/shelbygt500/ is probably not even turning a profit for Ford, but when someone picks up an automotive magazine with an article about the car, it makes them more likely to buy the entry level Mustang at 40% of the cost, or any other Ford product.

The Dodge Viper is probably a better example, as it's a totally custom chassis, body, etc.

The GT500 still shares a LOT with a production Mustang, and al the economies of scale that imparts. It's also producded in very high quantities, 5000+ yearly. They're making money or they wouldn't buiild that many.

Even better example is Bugatti Veyron, fastest production car in the world. Some analysts say that company is losing over $6m on every car sold, despite $2m price tag. Only 400 cars were sold to date.

The Ford GT (http://en.wikipedia.org/wiki/Ford_gt) is a better example than the GT500 as well.

I've heard it explained that halo cars help create brand loyalty with an instinctual response similar to "My dad can beat up your dad" fights on the schoolyard.

It's a product that raises perceived quality of the rest of the brand.

http://en.wikipedia.org/wiki/Halo_effect#Halo_effect_and_bra...

I believe orik is referring to the halo effect, a term used in marketing. It's the idea that when a customer has a positive experience with a companies products, they will likely choose that companies products in the future simply because of the past positive experience.

The idea is the customer thinks: "Look at this amazing product Nvidia is producing! They must have great engineers working on bleeding edge technology!".

Even if they don't buy the $3000 GPU, they now associate Nvidia with high quality GPUs which may influence them to buy Nvidia product in the future.

http://www.investopedia.com/terms/h/halo-effect.asp

An iPhone is a good example. Real life example: my wife bought an iPhone, I was impressed and bought one, which led to me buying a MacBook to do dev work (and because "hey, they do make good machines"), which led to a whole house full of Macs and various Apple gear.

Because they made what I thought was a decent phone at the time, they sold some other gear as a result.

I disagree - I think that's a confused example of what a halo product is.

I am not sure that Apple has a halo product, but if they did, it would be the new mac pro. (regardless of how you feel about the new mac pro...)

It was the iPod that device that really demonstrated the value of a halo product.

Initially the iPhone 8GB sold for $600 on-contract, which worked out to an ASP of around $800 or higher, and average TCO over 2 years of $3k.

Also it was announced 6 months prior to release, was often sold out after it's release, and completely unavailable in most countries until months or years after initial release.

It was very much a halo product (at release, less so over time).

In fact, I would probably consider it as one of the most successful halo products ever - as it not only cast it's halo over the entire Mac+iPod product line, but it eventually became the revenue driver of the entire company.

Apple itself is the halo.

Assuming the phrase "halo product" derives from "halo effect", I'm confused about how my example isn't the quintessential definition. 1. Buy iPhone. 2. Enjoy iPhone. 3. "Hey, I'll bet Apple's other products are pretty good, too." 4. Profit for Apple.

Disagreement on the definition, or poorly explained personal example?

(EDIT: now that I think about it, our first iPods were the halo product that made me discard old Apple biases that I was carrying from the 90s.)

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