What are examples of price skimming?

Price skimming is a strategy where a company sets a high initial price for a new product and then gradually lowers it over time. Examples include technology products like smartphones or gaming consoles, which are often launched at premium prices to capture early adopters willing to pay more. Another example is the pharmaceutical industry, where new drugs may be priced high upon release to recoup research and development costs before competitors enter the market. Similarly, luxury goods often use price skimming to position themselves as exclusive while eventually offering discounts to attract a broader customer base.