Pricing Power of the TI-83 Plus

For many of us in United States, the TI-83 Plus is the quintessential (pre-college) calculator. It was required for many classes (e.g. AP Calculus) and the $100+ price tag 10+ years ago did not do wonders for the wallet. Still, the multi-line interface, matrix operation capabilities and games such as snake made it a versatile instrument pre-iphone. 

Yet, as an electronic system in a highly competitive field, why is the same TI-83 Plus still almost as pricey as a decade ago?? Keep in mind that with the same money, one can buy a 4th gen ipod touch with a Color screen, gigabytes of ram and streaming video+wifi and that the same smartphones a year from now are probably worth far less (try selling the older motorola razr's now). This extends beyond phones to vcrs (remember those?), stereos etc.

John Herrman from Buzzfeed gives us a reasonable explanation - captive customers:

This is a list of CollegeBoard-approved calculators for the AP exams (college-level high school courses) which includes the TI-83 Plus. The TI-83 Plus has remained on this list for at least a decade, requiring each new batch of customers/students to either buy from the year above (which may or may not happen depending on the older students' needs) or buy a new set of the same product.

This is only the beginning, however - teachers get used to these approved calculators (specifically) TI-83 Plus and learn to teach with them. Study guides, manuals etc. for calculus come directly with TI-83 Plus-specific instructions, further strengthening the stickiness of the the product. Given that the underlying topics (high-school/early college mathematics) do not change much, the product does not need to improve much. 

As a result, for these certain products (especially the TI-83 Plus) there is an institutionally-mandated and sticky demand for these.


Unfortunately, it is harder to translate this into an investment because calculators as a whole is only 3% of revenues for the producer (page 6), Texas Instruments (TXN). Calculators revenues are lumped into an "other" segment that includes other products - but it is interesting to note that this other segment has the highest operating margin of the company: