Wait. What? How is that possible? Why would anyone say that Macs and iPhones cost less when everyone knows you pay more for a Mac or iPhone than comparable competing products? Because price is not cost.
The price of a product is what you pay when you buy it; whether the suggested retail price, or a discounted price based upon a sale or a volume discount, price is what you pay to get the product in the first place. OK, what is cost?
Price vs. Cost
Here is an example of price vs. cost that most of us can identify with and have experienced directly. The automobile. When you buy the car there’s the price you pay to drive it away from the dealership. But that price does not reflect the overall cost of using the car which also includes insurance, gasoline, needed repairs and replacements, not to mention the depreciation. Those are elements of the so-called total cost of ownership (TCO). Add it all up and buying and using a car is much more than the price.
Owning a Mac and an iPhone works much the same way. There’s the initial price tag which often can be a little higher than a Galaxy-whatever because Samsung needs to discount those phones to a price lower than the iPhone just to sell them. Macs work like that, too, as Apple seldom discounts a Mac, but Windows PC makers compete mostly on price just to sell products.
How do Mac and iPhone stack up when compared to the TCO (total cost of ownership)?
Here’s a good example and it starts with IBM which gave employees a choice– Windows or Mac. It didn’t take long for the Mac to make huge inroads at Big Blue according to this report. IBM has more than 90,000 Macs deployed and only five administrators for support. It’s billed as the largest Mac deployment on earth.
IBM found that not only do PCs drive twice the amount of support calls, they’re also three times more expensive. That’s right, depending on the model, IBM is saving anywhere from $273 – $543 per Mac compared to a PC, over a four-year lifespan.
That’s 1,300 new Macs being deployed each week at IBM. Why? It’s what employees want. And it costs IBM much less than Windows PCs which often are priced far less. Because employees want to use a Mac, they also remain more engaged and productive.
See? I didn’t write a word about resale value because, you know, obvious.
Cost vs. Price
Similar studies indicate exactly the same kind of cost reduction for companies that deploy iPhones. In the iPhone vs. Android competition, the former has a higher price tag, the latter has a lower price tag but often ends up costing much more. Why? It’s a phone, right?
Across the world, Android smartphones handily outsell Apple iPhones by wide margins — yet Android devices rarely have significant presence within enterprise environments. Even in the United States, where the market share for the two smartphones is roughly equal, iPhones account for about 70 to 90 percent of enterprise smartphones in use
Why? Why wouldn’t a business go for the cheaper solution? Because cost is not price and though Android devices might be less expensive to buy, they are not less expensive to own and use. It’s basic.
Security – most malware for mobile devices runs on Android OS; about 98-percent. iOS remains more secure, easier to upgrade.
Reliability – enterprise IT departments like predictability and iPhone provides exactly that with a limited model line but a single OS version across all devices. Android? Not so much. That means far lower support costs over time.
Applications – business apps abound on iPhone but are less business savvy on Android. iPhones have many email and calendar apps, Microsoft Office and Office-like productivity suites, and even the iWork suite of Pages, Numbers, and Keynote built in.
Fragmentation – not only is Android highly fragmented at the OS level, it is worse with hundreds of manufacturers and models which seem to be impossible for IT groups to support, so they follow the water downhill.
The comparison between price and cost should be sufficient but there is one last nail to pound into the coffin. Resale value. Cheaper Windows-based PCs have almost no resale value to a corporate IT group, but Macs do. They last longer in use and that helps reduce the overall TCO, but even older Macs have higher resale value which helps to mitigate the higher price.
That’s the way it works with iPhones, too. Higher initial price tag, lower overall cost, and much higher resale value which drives the TCO down more.
Macs and iPhones cost less because it’s math.