Skimming pricing is a strategy where a company sets a high initial price for a new product or service to maximize profits from early adopters. This approach is often used for innovative products, such as smartphones or video game consoles, where consumers are willing to pay more for the latest technology. As the product becomes more established and competition increases, the price is gradually lowered to attract a broader customer base. This method allows companies to recover their development costs quickly while capitalizing on the demand from those eager to be the first to own the product.