Allow me a moment to argue that price tags don’t matter too much because prices are only a small part of the customer and user equation, and, seemingly, an important but not all-important part of the marketing and sales game.
Price vs. Cost
If you’ve read Mac360 for any length of time you know that we differentiate price vs. cost. Price is what you pay for a new iPhone, iPad, or Mac. Cost includes price but also includes accessories, AppleCare, repairs, and those totals are reduced when resale value is pumped into the equation.
Yet, almost everywhere, the focus is on price. And Apple’s prices are more expensive than most major manufacturers. That breeds higher gross margins for Apple hardware and that results in higher profits.
Let’s take a look at Samsung’s latest Galaxy-whatever line of smartphones, and Google’s upcoming Pixel 4 smartphone. If history is our teacher, then simply waiting a month after their latest smartphones are released gets you a huge discount, even though their smartphones are priced near Apple’s iPhones at the high end of the spectrum.
Last year Google released the Pixel 3 and most reports indicate it didn’t sell too well. Is that the fault of the phone itself, or does Google’s anemic hardware and messy marketing make a difference. It doesn’t matter because later in the year Google released the Pixel 3a at about half the price, and while seemingly a bargain for the hardware, it, too did not make the bestseller lists.
Price matters, but not that much.
Cost matters more, but getting to cost takes time and effort and multiple components.
What about Apple’s iPhones, iPads, Macs, AirPods, and Apple Watch? All are priced higher than most competitors, and if you walk into an Apple Store you’ll pay the retail price tag. Sure, you can make it up when elements of costs are figured in, and resale value deducted, but Apple owns the premium end of the spectrum for a reason.
That’s where the money is.
In the meantime, even if Apple’s price tags on various hardware seems to top competitors, that, too, doesn’t matter because you can find Apple techno-gadgets on sale everywhere else. Amazon, Target, Best Buy, Walmart, and all over online. The sales come and go so you need to be willing to act fast, but savings are there.
So, does price matter as much as it used to? I don’t think so.
Many Apple customers have figured out the price vs. cost issue, applied it to other products from PCs to smartphones to cars and appliances, and price is just one component among many. More important than price is value, and that makes up a major element of Total Cost of Ownership.
As an example, I was planning to buy a new mid-range DSLR this year at nearly the same price as my iPhone 11 Pro Max. After taking photos and movies for a week that were indistinguishable from mid-range DSLRs, my iPhone just saved me nearly $1,000.
Price just don’t mean what it used to mean.