Apple is so expensive that most people cherish the launch events without even expecting anything for themselves. That’s cute of them!
But have you ever wondered why Apple products are so high in price as compared to other brands? What is there in an iPhone or a Mac?
It is said – once an Apple user, always an Apple user.
No. I am not talking about those teenagers who have absolutely no idea why they need an Apple product. They are clueless brats who just need that logo.
I am talking about the professionals and business people in the real industry. Why do most of these professionals own the complete ecosystem of Apple?
Are these iPhones really justifying the price? Why does this company need to hike its prices so much?
Just too many doubts!
Even if Apple pockets a huge amount of profit, there are still a few factors that almost everyone neglects. Here are the 7 factors:
Why Apple Products Are Expensive? Several Reasons!
If you compare an iPhone with any Android Phone then the most basic difference comes under software. Android Phones support Android and iPhones support iOS.
However, Android gets almost free and readily made Android OS from Google. Meanwhile, Apple has to develop the OS on its own right from scratch. This is seriously very costly if we compare it to any other Android brand.
Why Google is providing Android for free while Apple charges heavily? Well, not really.
Android looks free for users and even manufacturers to install on smartphones. However, manufacturers need to purchase a license from Google to provide you with the Google Play Store.
Android smartphone manufacturers add that cost to the market price of the devices. If they don’t, people don’t really like to purchase Android phones without Google services.
This is what happened to Huawei-Honor when Google stopped providing its services to them.
According to the Android Authority report, Huawei is expected to lose 20% of its market share due to this US-China trade war. This is a huge blow to Huawei even after having the majority of the market share in China.
In short, Android companies are nothing without a Google license. Since Google is working on economies of scale, it is cheaper to manage it.
Moreover, Android is open-source. No need for Google to manage Android altogether.
In the case of Apple, it is managing everything on its own. Hence, they directly charge from the users.
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2] Premium Lifestyle Brand
Apple never targeted the middle class or poor people. It has managed to successfully build its image as a premium lifestyle and luxury brand.
Every brand has a positioning in the market.
For instance, Xiaomi is the king of budget smartphones while OnePlus provides the best value for the money.
Also Read | How Xiaomi Became #1 Brand in India
Even Microsoft has its own positioning. Bill Gates once said, “A computer on every desk, and in every home, running Microsoft software.”
Microsoft has its own target audience and respective strategies.
Related Post | Microsoft Business Model
Similarly, Apple has managed to show itself as a premium brand.
If someone is using an iPhone or a Macbook, that person is automatically assumed to have a luxurious lifestyle.
Apple even launched its ‘budget’ iPhone in 2020 under the name of iPhone SE and that costs more than Rs 40,000!
Honestly, that was a mockery in the name of budget smartphones. This price range is not at all a budget segment.
Apple has never been to mid-range or budget lines. It has always remained at the top of luxury brands.
This is the reason why almost every movie, celebrity, businessman, etc involuntarily promotes the brand.
In fact, Apple is so obsessed with its image and positioning that it does not allow villains in the movies to own an iPhone.
[Apple Won’t Let Villains Use iPhones In Movies, Says Rian Johnson: Forbes Report]
3] Iconic Apple Stores
Apple stores are the face of Apple. I would strongly recommend you to visit an Apple store if you are techy by nature. You will definitely love it.
Apple Store is not present in India, they are planning to bring it till 2021.
On 23rd September 2020, they already launched the Online Apple store in India. Let’s see how it works for physical outlets.
[Gadgets 360 Report: Apple to Launch Its Online Store in India This Year, Physical Retail Outlets Planned for 2021: CEO Tim Cook Reveals]
Coming to the point, Apple heavily spends on its stores. These Apple stores are located in the most premium places in the richest cities.
Almost every luxury brand spends heavily on marketing and branding. How will the customers feel the luxury if the brand itself is not serious about its aroma?
I can’t describe the beauty of these stores but I can definitely show it.
Recently, Apple launched its floating Apple Store in Singapore.
Another Apple Store in Shanghai, China.
And there are more than 500 highly attractive Apple Stores across the globe. None of them look ordinary.
The beauty of the architecture of these Apple stores needs heavy investments in construction and maintenance.
So, who will pay for it? Of course, you, as a customer. What else did you expect?
4] High-end Components and Finishing of the Products
Have you heard the story of Steve Jobs about the first iPod?
When engineers working on the very first iPod completed the prototype, they presented their work to Steve Jobs for his approval.
Jobs played with the device, scrutinized it, weighed it in his hands, and promptly rejected it. It was too big.
The engineers explained that they had to reinvent inventing to create the iPod and that it was simply impossible to make it any smaller.
Jobs was quiet for a moment. Finally, he stood, walked over to an aquarium, and dropped the iPod in the tank. After it touched the bottom, bubbles floated to the top.
“Those are air bubbles,” he snapped. “That means there’s space in there. Make it smaller.”Here’s Why Steve Jobs Dropped The First iPod Prototype Into An Aquarium To Prove A Point – Business Insider
To reach this level of perfection requires time, money, and patience.
You can troll Apple for its price or features but nobody can simply challenge Apple for its quality and finishing. That’s the authority they built!
Tech industry has a strong bias that Apple never compromises with its components and finishing. No matter what, the components will always remain reliable.
Apple brings most of the features too late but when it does, it’s perfectly optimized without any bugs.
Not only limited to premium components, but Apple also guarantees most of the products. If you are an Apple owner then you might be knowing that they don’t believe in repairing. They simply replace it for free.
If they charge you for repairing, then you would consider buying some cheaper non-Apple device.
But that’s rare. I mostly heard how Apple users have been using their iPhones for 3-5 years and Macs for the last 10 years. It plainly indicates quality.
5] Research and Development
Not all brands are heavily involved in Research and Development. Apple comes under the Big-5-Brands for a reason.
Even if they decide to do so, they can’t do that because of their own ecosystem compatibility.
If Apple sees some product worth providing to its consumers, they first need to work on their own hardware then software. This is not the end. They need to make sure that the product is completely optimized with the ecosystem.
One of the examples is its own Safari browser. Apple was working on its Windows version. According to TechCrunch, they had to scrap the whole development in 2012.
Although the reasons are unknown, it’s obvious that if Apple was any normal company working on Windows, they would never face this challenge. But the cross-platform optimization is tough.
Most companies work and complete a project only when they find the scope of scalability and expansion. Otherwise, they stop working on it.
Apple has a huge chain of ecosystems. The products are seamlessly compatible with each other.
For instance, an iPhone user will be able to read the same Internet article by simply switching from a tablet browser.
Also, if your Apple Watch is connected to your iPhone then you can seamlessly receive calls and notifications on your Watch.
Wearing Airpods? No worries. Connect it to Apple Watch and pick it by using your Airpods.
Not just hardware but apps and software are equally optimized. Anyone who needs high productivity will get addicted to the Apple ecosystem. This is the reason why computer professionals prefer an Apple ecosystem.
Literally, everything will be connected to each other – iPhone, Mac, Apple Watch, iPad, iTunes (Music), etc. Hence, the data is synchronized with each other and you are truly experiencing the magic of great compatibility.
This is completely missing in Android +Windows because two separate companies own it. Hence, the discrepancy.
The people who genuinely need Apple for their business or usage are the ones who are really into the Apple ecosystem because of the seamless compatibility.
Otherwise, you know that iPhone owner friend who just has an iPhone without the ecosystem. 😉
Recommended | Why Avoid Android Tablets?
So, Apple knows well that even if they keep their products expensive, people are still going to buy them.
7] Other Costs
Whenever you buy a smartphone or an electronic gadget, the cost is not only about the components that are fixed in it. In addition, there are various hidden costs.
Apple keeps marketing its newly launched products heavily. This includes all the money for print media, news media, digital media, social media, etc. Apple advertises almost everywhere.
Also, social media influencers charge a lot for influence marketing. Although Apple doesn’t need it, it is done for the brand value.
B] Labor Cost
We can’t merely buy components because its hardware takes it to develop from scratch. For this reason, the company requires laborers and needs to pay them as well. Places like India have cheap labor costs but the US labor cost is significantly higher.
C] Custom Duty
Every product that is made out of India has to pay heavy-duty charges. These taxes are different for every country. This is the reason why an iPhone is much cheaper in Dubai or other countries. In case you want to buy one, try to get it from Dubai.
D] Legal Battles
Every Internet company keeps on getting legal actions. It requires funds. Larger cases need larger expenses. These are major recent examples.
- CNET: Apple and Fortnite developer Epic Games court battle to resume in May 2021
- The Wall Street Journal: Apple Faces $1.4 Billion Lawsuit in China in Siri Patent Fight
- TechCrunch: Apple agrees to a settlement of up to $500 million from a lawsuit alleging it throttled older phones
- First Post: Apple Loses $440 Million Against Virnetx Inc In An Intellectual Property Case
- Observer: Apple will have to pay as much as $60 million to 12,400 former and current employees at 52 Apple stores
This is just the tip of the iceberg.
In the end, this is the most obvious reason. Apple knows it very well that even if they keep their products expensive, people will still keep buying Apple products. The two common reasons are Apple branding and ecosystem, as I mentioned earlier.
Apple is in itself such a unique product maker that it will still be fetching its core user base. This makes it audacious to consume a maximum of the profits.
So, the next time you wonder why Apple products are so expensive, you know the reasons.
No doubt, Apple is an expensive deal but we can’t really complain as it has a unique audience.
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