When the Battery is Pricier than the Phone

Last week I ran over to Best Buy to get a replacement battery for one of our cordless phones. The phone is about three years old and is part of a two-phone set.

I found the battery in no time but was dismayed to see that it cost $22.95. Seems expensive, right?

So I began looking around and quickly spotted entire phones for sale that were cheaper than just the battery. Crazy, right?  I started thinking about how this could be and here’s what I’ve come up with.

Phones are made up of lots of parts. They have little speakers, circuits, microphones and, yes, batteries. Now, one would think that under normal circumstances, the value of the sum of the parts of the phone would be equal to or less than the value of the entire phone. But no. In this market, an individual part, in this case the battery, is valued to be equal to the sum of all the parts. Why?

The only reason I can come up with is that, for the consumer, the individual parts have zero value on their own. They only have value when they are packaged with the other parts. In other words, a cordless phone battery is useless to someone unless they have a cordless phone, and likewise, a cordless phone, minus the battery, is similarly useless and without value.

The weird thing about this, and what I’m getting hung up on, is that the cost of production seems to play no role in the relative pricing of these items. I think it’s safe to assume that the production costs of one phone battery are a fraction of the production costs of an entire phone, especially when you consider the fact that when you buy a cordless phone, it INCLUDES a cordless phone battery.  Now if phones and phone batteries were always made by the same company, then none of this would matter. In fact, they might inflate the price of the battery to encourage people to buy more phones.