9 Reasons Apple's Products Are So Expensive

Xiaobai Software  2022-04-16 22: 22  read 180 views

Apple's products are often significantly more expensive than those of the competition.While Apple appeared to be leveraging its own brand name at first, it's pricing it far more than one might think.Factors such as Apple's exclusivity ecosystem, privacy policy, marketing costs and high resale value also contribute to the high price of the product.

Next, we'll explain to you several factors that make Apple products so expensive.

1. Apple's Ecosystem

In tech, an ecosystem broadly refers to a group of individual devices that complement each other to form a larger, more useful unit.Take the iPhone and MacBook for example.While both are separate devices, when used together, they increase each other's usability and improve the overall experience.

Apple's ecosystem is different from other companies in that Apple devices usually only connect with other Apple devices and work very well when connected.

The more users enter the ecosystem (by adding more and more Apple products to the ecosystem), the greater the rewards.This, along with the exclusivity of the system, largely contributes to the high prices of Apple products, as users are willing to pay more for an improved experience and get gadgets that are compatible with what they already own.

2. High quality and long life

Apple products often outlast competitors because of their high-quality hardware and software.Hardware is carefully designed, manufactured and assembled using materials such as aluminum.Add-on software (the operating system and other native applications) is optimized to take full advantage of that hardware, since Apple doesn't need to design for any other device.

As a result, the final product not only feels good in the hand and looks good, but it is also durable and performs exceptionally well. Together, Apple's hardware and software provide users with a highly customized, high-quality user experience, forcing them to pay more.

3. Innovation

Apple's technological innovation is another reason for the price hike of its products.The recent appearance of the M1 CPU chip is a good example.

By replacing Intel's CPUs with Apple's own ARM-based chips, Apple not only gets better performance from its Macs and iPads, but it revolutionizes the CPU industry.And Apple has been doing this for a long time; the iPod is a prime example.This behavior has made Apple a thought leader in Silicon Valley.

To continue to lead the tech industry, Apple must invest heavily in the research and development of new technologies.According to Statista, its R&D budget has recently topped $200 billion.

4. Privacy

Apple charges so much because it doesn't sell user data for a profit like many other companies do, and it doesn't have user-tracking software preinstalled.Instead of selling user data, Apple charges users more.As awareness grows about advertisers tracking users, Apple is capitalizing on the fact that privacy is priceless.

 

However, that doesn't mean Apple doesn't track you at all.It makes sense that it does this to improve its own services and products.Without feedback, the company couldn't customize a product so well suited to its users.

5. Free OS, Apps and Updates

Apple's operating system gets one major upgrade every year, and dozens of smaller updates throughout the year.In contrast, versions of Windows come every few years and often require a fee.While Microsoft has claimed that upgrading older versions of Windows to Windows 11 is free, you still have a lot of in-app purchases that cost a lot, like the Office suite.

With a Windows laptop, you have to buy the Office suite to get the workspace tools, and newer versions of them aren't free, you have to buy it too.In macOS, you get Pages, Numbers, and Keynote for free, and you get updates for them for free.

The company had to make significant investments to keep these and more software free.Apple generates this investment by charging customers more.

6. Marketing and Support Fees

 

Product cost is roughly a combination of direct material cost, direct labor cost, and manufacturing overhead.

Here, as you can see, there is no mention of marketing costs and post-purchase service costs, for example, a company has to spend money to sell their product and retain customers.The same goes for Apple: In addition to production costs, the company spends a lot on marketing and support.

For example, all Apple Stores are a way to market Apple products, and they cost a lot.They have iconic infrastructure; they are full of experts; and they provide a great way to interact with the product.Then there's Apple Support, where you can contact a technical service person to troubleshoot issues with your device and ask questions you want to ask.

What's more, Apple is known for delivering some of the most impressive and groundbreaking ads we've ever seen.All of these -- and countless other factors -- are costs in addition to the cost of the product, which explains why Apple charges so much.It would be misleading to simply think that Apple costs $400 to produce an iPhone and that the remaining $600 is profit.

7. Brand building

Apple has become a lifestyle brand by launching products in numerous categories such as watches, phones, computers, headphones, notepads, and more.Add in the intricate detailing, premium feel and perceived value of Apple products.It is a luxury lifestyle brand and owning its products is a symbol of status and luxury lifestyle.

 

Users in this lifestyle want to keep it and are happy to pay the price.Those who weren't wanted that lifestyle and were prepared to pay what Apple asked for.

8. Resale value

三星Galaxy S9和iPhone X都是在2018年发布的,售价分别为700美元和1000美元。今天,一台二手Galaxy S9的价格在50美元至150美元之间(14%的保值率),而一台二手iPhone X的价格仍在150美元至400美元之间(27%的保值率)。

9. Customer Loyalty

Whatever your reasoning, one that will never make Apple reconsider its pricing is its loyal fan base, ready to pay a premium.Apple has seen ridiculous price and revenue growth over the past few years, but so has its product sales and popularity.

 

While all of the above reasons contribute to this cult fan base, perhaps lifestyle brands are the most important.

Are Apple products still worth buying?

These are all reasons why Apple products tend to be more expensive than others.The price may not always be reasonable (like the $1000 Apple Professional Stand), but the important thing is that the product still sells well.

However, that doesn't mean you have to spend too much to get them.For example, when buying an iPhone, you can save money by opting for a refurbished instead of the latest one.While the product won't be brand new, the experience will be complete.

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