Visit Business Insider's homepage for more stories.Narrator: In 2016, the iPhone 7 started at $649. Because of this "Apple Tax" Apple products are often more expensive than its competitors. While there are plenty of news readers on the Mac, Reeder wins our. And adding memory or storage to these products increases the cost even more.Reading a lot of blogs can be tough to manage without an RSS news reader, which consolidates everything you read in one place. Apple News will optimize for iPhone, iPad, and Mac, so your readers will have a great experience no matter where they’re reading.So what makes Apple products so expensive?Mohan Sawhney: Apple has, over the years, built a reputation for quality and the industrial design of its products.Narrator: That reputation has created millions of loyal customers.Marco Pierre White Jr.: I've been here about 36 hours now. As the US's first trillion-dollar company, Apple's market cap is higher than the GDP of Switzerland. These prices bring in huge profits for Apple. When Apple released its new model, the price increased by 60%. It's even more dramatic for the Mac Mini.Apple's high prices reached meme proportions during the announcement of its Mac Pro in June 2019. The 256 GB MacBook Air, for example, costs $1,299, but you can get a more powerful Windows laptop for over $100 less. I'm probably getting two, man!Sawhney: So that brand loyalty translates into a premium that they're able to extract from customers who are unwilling to switch out of the Apple ecosystem.Narrator: That premium is also known as the "Apple tax," or paying more simply because it's an Apple product. It's only 1,000 pounds, man. Can't wait to get my hands on mine.
News Reader Like Apple News Professional Reference MonitorAnd Apple's accessories also have high premiums compared to non-Apple products. If you want a 13-inch MacBook Pro with 512 GB of storage, you have to pay $400 more than the base model. So if you want more memory, you have to pay more Apple tax.Narrator: With Apple's computers, these upgrades get even more expensive. Apple had botched the messaging, and its $1,000 stand became infamous.Sawhney: Apple does something else that's a bit sneaky, which is that when you're buying the iPhone, you can't add memory to it. And like the Mac Pro, they'll all be available in the fall.Narrator: In truth, $6,000 for a professional reference monitor of this quality is comparable to the competition, but that didn't matter.![]() For example, Sony competes with Apple in smartphones, but all of the camera sensors that go into an iPhone are made by Sony.Narrator: And those components cost a lot less than a new iPhone.Sawhney: The bill of materials is about $490 for a phone that is priced at $1,099. But are these products worth the premium? Apple loves to talk about its innovation.Narrator: And iPhones have added great features, like OLED displays, faster processors, and thin bezels, but competing products have many of the same features.Sawhney: The components that go into making a smartphone are fairly standardized. Apple has kept its proprietary lightning connector while removing useful ports, like the headphone jack and the SD card reader, forcing consumers to buy expensive dongles like its $39 SD-card-to-USB-C reader. Even Apple's cables cost more. Warface for mac downloadThat handbag isn't a more functional bag, but customers still value it more.Sawhney: So, all our products become an extension of our personality. As with Gucci or Hermès, customers pay more because the logo is a status symbol. Instead of a technology company, think of Apple as a luxury brand. What makes Apple special is its ability to pull larger profits than its competitors. Obviously, Apple wants to make a profit, so the bill of materials has to cost less than the device. Not only was it more expensive, but the difference between the bill of materials and the retail cost was much greater. ![]() But if Apple wants to keep its loyal customers, its innovation will have to keep pace with its premiums.EDITOR'S NOTE: This video was originally published in November 2019. Keep the old models around, just at a very slight discount. And the customers who don't want to spend $1,000 on a new phone? Apple has a plan for that.
0 Comments
Leave a Reply. |
AuthorDustin ArchivesCategories |