How many of Apple’s most cherished customers would appreciate lower prices for Mac, iPhone, or iPad? The line would be long and winding down the road. Why? If we’re willing to pay a premium for Apple, how much more so would we be willing to pay less?
With a few exceptions, and for about as long as I can remember my Mac users– which date back to the last century– Apple has been a premium brand with relatively expensive products. The problem with that product positioning is that Apple’s price are relative. Let me explain.
The Price Hole
It’s not that Apple does not compete on price. Apple does. Samsung has priced some of its flagship smartphone models higher than a comparable iPhone, yet Apple sells more. Microsoft’s highly acclaimed Surface Book Pro has a price tag within dollars of a comparably equipped MacBook Pro. See where this is going?
Apple just chooses not to play at the low end of the price spectrum. Why not? That’s not where the profits reside. But there are some exceptions on both ends of the spectrum.
- First, Apple TV. Can you name another streaming media device with a higher price? Not Roku. Not Google. Not Amazon. Check out Nvidia’s Shield TV. Apple TV may sell at a premium, but it’s not the most expensive game in town.
- Second, Apple Watch. It’s the most expensive on the market, right? Nope. Some models are more expensive than various and sundry Android-based smartwatches, but Watch is something of a bargain and starts at $269, which is quite competitive. Yes, it can go as high as $1,249, but we’re talking fashionable utility here.
- Third, Apple AirPods. What? $169 for a pair of wireless earbuds? That’s outrageous until you compare Apple’s price tag with others. AirPods are within dollars of the least expensive brand name wireless earbuds. Go figure.
- Fourth, Apple iPad. Sure, you can spend almost as much on an iPad Pro as an even more powerful entry-level MacBook, but a full-sized 2017 iPad model– with faster CPU than last year’s iPad Air 2– starts at $329.
- Fifth, Apple iPhone. Wait. What? That’s crazy. Nobody has a higher price tag on a premium smartphone than Apple’s iPhone. Right? Well, as it turns out, you can get an iPhone SE with 32GB of storage, great camera, fast CPU, and all of the latest iOS tricks than the lesser equipped Moto G5 Plus, priced $100 less.
Here and there in the entire product line, Apple has been inching its way toward a hole in the price tower. Yes you can spend plenty more than just about any technology competitor’s products, but up and down the line, Apple has a few product bargains that compete well without compromising Apple’s famed quality that also gets your toe into the just as famed walled garden and curated ecosystem.
Apple’s price wall has a hole in it, and I see new customers streaming in, and some competitors feeling the gross margin pinch.