Why? Sure, Apple only plays in the premium end of a product’s space and that means it commands higher prices and gets higher gross margins which leads to greater revenue and envious profits. Why are Apple’s products so expensive?
Parts Is Parts
All one has to do is figure out what Apple provides to customers for the price and you begin to see an aggregate differentiation when compared to the likes of, well, any competitor; Samsung, Google, Microsoft, Amazon, Dell and HP, or any of the Chinese knockoff hardware manufacturers.
Apple’s products are priced higher because customers get more.
More? Seriously? Parts is parts, right?
Not so fast.
Let’s take Microsoft’s Surface PC line as an example. Those notebooks range from a few hundred dollars to many thousands of dollars– and they all run Windows– so there must be a difference in the hardware, right? And, when you look at the parts you begin to see differences– storage, RAM, display, CPU performance, and so on.
Let’s look at Samsung’s smartphone line as another example. While the company’s flagship Galaxy class smartphones rival iPhone’s best with similar prices and more features, Apple’s models have higher resale value and tend to last longer and have fewer hardware issues (Galaxy Note Flame and Galaxy Fold Folded are two examples) than competitors.
Apple can charge a higher price tag because customers get more for the money, including the much maligned ecosystem (sometimes referred to as the Walled Garden) which includes software, iCloud backup and sync, easy to install security and performance upgrades, telephone support that actually works, not to mention more than 500 retail stores which have an actual human to provide support.
All those extras cost money that many PC makers and smartphone makers don’t have to match because they, 1) don’t have an ecosystem to support, and, 2) don’t have a direct method to support customers, and 3) don’t have to build their own operating system or associated applications.
Apple does all that, and all those components work well together. But they come with a price.
The old adage of you get what you pay for applies here, and it’s visible on every Apple product. We can call Apple’s efforts to keep customers and attract customers as a form of manipulation, but at least it is a time honored method.
Apple kit is more expensive because users get more– more usability, higher resale value, fewer hardware and software issues, face-to-face support, and improved privacy and security, which combine to create an ecosystem that works better.
For a price.