What happened? Put simply, you get vastly more personal computing power and capability for the money than the original Mac brought to the table 24 years ago. Half price. 10 times the capability. The iPhone changed that.
Components for personal computers slowly decreased in price for about 25 years. More power and capability, higher quality components, lower prices. That changed when the iPhone arrived. What we have seen since its launch in 2007 is a steady increase in power and capability, yes, but also a steady increase in the price tag.
$2,495 today will get you a very powerful iMac or MacBook Pro. In 1984 dollars, that original $2,495 will buy a $4,999 iMac Pro. More power and capability; less money. The original iPhone sold for $599. Today, in today’s dollars, that same amount will get you an iPhone 8. $599.
We may look at the iPhone Xs and Xs Max and decry the ever increasing price tag of Apple’s ubiquitous smartphone, but the reality is the same old same old. More power and capability, lower price.
Relatively speaking, of course.
iPhone 8 is priced the same as the original iPhone from 2007, but you can get a new iPhone 7 for less– $449. What is revolutionary about iPhone’s price tag is not the annual bump in power and capability, but the price tag. A new MacBook Air is half the price of the original Mac from 1984, but you get easily 10 times the capability. A new iPhone 8 is the same price as the original iPhone from 2007, but you get vastly more power and capability– camera, apps, storage, display quality, and more.
Why not a lower price?
What is interesting about Apple’s ability to deliver more power and capability with each new iteration of iPhone is the company’s ability to keep prices relatively static at the entry level, and far higher– by $1,000 from iPhone 7 to iPhone Xs Max fully maxed– with newer, premium models.
In general, personal computers have dropped in price down to a few hundred dollars. The Mac has reached a plateau of sorts and remains the most expensive major brand. The advent of Android OS to the smartphone arena had a similar effect. Very good smartphones are available for a few hundred dollars, too. As usual, and definitely with Apple, up the quality level and the price goes along, too.
iPhone’s price tag is revolutionary in that it has not followed the continuing trend set by other smartphone manufacturers. More power and capability, lower price.
Now we know why Apple has $200-billion in the bank and still ranks as the world’s most valued company.