Apple has become twice as expensive (Adjusted for inflation)

[TheFluffyDuck]

I have done some back of the envelope calculations using the base flag-ships and watch. Real simple stuff, I just took data from Mactracker and used this website for the inflation calculations. It would be interesting to see how the prices of the decked out versions of these devices are, as it has been suggested Apple put in a small amount of memory to force people onto the more expensive devices. I have skipped anomalies likes iPhoneX, SE, 5C, Series 1 etc.

I wish I had a bit more information for the Jobs era, other than my personal experience, but most of the time people brought on-plan rather than outright back then, from memory.

There seems to have been two ~30% price hikes in the last 7 years, one as soon as jobs died and one from now. But overall a near 2x price increase for the same flagship in that time period. But prices have been quite stable for the most part which surprised me.

But this last price hike has finally priced me out. I can not afford to spend the price of a decent gaming computer on a phone, and another small computer on a watch. It is absurd. Apple is good, it is just not THAT good. I was about to buy a series 4 aluminum with cellular until I realized its the best part of $1000 AUD. I can't. I got bills...

Apple are also hoping you are stupid with the obfuscating of facts, and omissions in their advertising now. "120 hz touch screen", not to be confused with 120 hz refresh rate of the screen. Not mentioning that the ECG will only come out later and be in the USA.

Speaking of delayed later, another forum member opined Apple has developed a bad habit of just not releasing anything on launch: Airpower, nope. ECG, Later and US only. Airpods 2, nope. Apple Pay Cash, nup. Portrait mode, Nup. Dual Sim, Nope.

PLus the QA and build quality of devices is failing, BendGate, iPhone 7 logic boards, new Macbook pro issues. Macbook Pro 2011 graphics issues etc.

What has improved twice as good to warrant twice the price? Component speed and price follow Mores law so that doesn't count What has actually improved? I posit nothing if anything things have slipped.

I now vote with my wallet, as I can't afford these products. Which is a crying shame from the effort Steve Jobs put to make iMac accessible to everybody?

 

[s15119]

Apple has always been expensive. You pay more for great products. Or move along and buy some other cheap crap. But whining about prices is just tacky. If you can't afford steak, eat hamburger.

 

[AidenShaw]

Apple has always been expensive. You pay more for great products.

I think that the point of the OP is that the products really aren't that great anymore.

From the trashcan Mac Pro disaster to other things - the justification for the price premium is losing ground.

How can you defend the "you're holding it wrong" nonsense?

 

[s15119]

I think that the point of the OP is that the products really aren't that great anymore.

From the trashcan Mac Pro disaster to other things - the justification for the price premium is losing ground.

How can you defend the "you're holding it wrong" nonsense?

Yawn. If you don't like the products, go buy something else. Millions and millions of others think they are fantastic products. I love all my Apple gadgets. You should buy what makes you happy. I am happy that this site has an ignore feature and I will never again read you blathering about "you're holding it wrong"

 

[TheFluffyDuck]

Great, the good old, "I'm rich, you're poor lol" argument. Completely ignores the fact they have become twice as expensive in a short amount of time for no benifical reason.

 

[ksec]

iPhone 4s starts at $649, so your graph is wrong to start with. The 3G, 3Gs, and 4 Starts at $599.

When you move up to the Plus size, starting in 6 Plus, that becomes $749, and 7 Plus @ 769, 8 Plus were 799.

Now Xs Max is $1099. It really is hard to swallow, and to make the matter worst repairing it cost much more I am not even sure if I am in the social class to buy it any more. And to make matter worst resale value is on continuous decline.

 

[Tech198]

i think its just the exchange rate here.... Apple doesn't control that.

iPhone 4s starts at $649, so your graph is wrong to start with. The 3G, 3Gs, and 4 Starts at $599.

When you move up to the Plus size, starting in 6 Plus, that becomes $749, and 7 Plus @ 769, 8 Plus were 799.

Now Xs Max is $1099. It really is hard to swallow, and to make the matter worst repairing it cost much more I am not even sure if I am in the social class to buy it any more. And to make matter worst resale value is on continuous decline.

Very hard,, i can't even pay that much for a phone... however, users are to blame, because they want more.... and Apple wants to be the best quality...... otherwise users will complain..

Show me a PC trackpad laptop at $600 is equally as good as a $2,000 Mac laptop's trackpad..? it can't be done reliability.

Premium, means Premium.. otherwise we're saying you pay $200 for a Chrombook that "is just as good" as the top of the line Mac.... Not true..

 

[gnomeisland]

Thanks for doing this! Very interesting to see the inflation numbers. I don't think you're 100% wrong but I don't think it is as dire as you make it out to be. These numbers just confirm to me that the X and now XS models are really a new class of premium smart phone. Given your inflation numbers the pricing of the XR actually makes *more* sense to me as it is closer to the long-time selling point of $650 adjusted for inflation and lessens the sticker shock by being closer in price to the old 'plus' models. Same for the Watch Series 4, looking at inflation the new base price seems more like a correction than anything.

I think Apple is also preparing itself for the effects of the US-China trade war. Yes, technically they are exempted from that but it must have some impact as Apple sources a lot of supplies all over the world.

Regarding quality, I'm not thrilled with some of the recent snafus but as a long time Apple user I have to point out that none of this is new and it was happening before and during the Jobs era. If anything, Jobs was less willing to admit he/Apple was wrong. Sure, he seemed more punitive than Cook but Cook still seems to be pushing his engineers/designers. Apple has changed since Jobs left but I think the "decline" is often exaggerated and/or put entirely on Cook's shoulders.

Also: the iPhone 4s was also $650 for the base https://www.statista.com/statistics/244666/retail-pricing-of-the-apple-iphone-4s/

 

[tofagerl]

Apple's prices and my salary have actually increased pretty much at the same rate, but not everyone is in that position. It's really too bad that having the best computer is now conflated with having the prettiest computer, and that we have to pay for both when we just want one of them.

 

[theluggage]

What has improved twice as good to warrant twice the price? Component speed and price follow Mores law so that doesn't count What has actually improved? I posit nothing if anything things have slipped.

To be fair, you should also look at competing prices: I think you'll the price of a "flagship" phone from Samsung or Google has gone up similarly. "Premium" laptops from Dell, HP, Lenovo, Razer etc. may or may not offer better value/features than Mac, but they're now pitching in the same ballpark price-wise. Some of the MS surface products make Macs look like the cheap option.

...of course, the difference is that Dell/HP/Lenovo etc. have a whole range of cheaper options, while MS and Google still win if you buy a bargain bucket no-name machine to run their software and services which the Pixel and Surface are designed to showcase.

The reason for this has nothing to do with the power or features of the machines: since the 80s, the price of consumer electronics - and particularly computers - has been dropping in real terms while the power has been rising exponentially. (In very broad terms, I'd say the purchase price of a half-decent computer system has remained at ~$1500 regardless of 40 years of inflation and several orders of magnitude increase in power). This was only economically possible because (a) the market was also growing rapidly and (b) the rate of technological development ensured that products were genuinely obsolete and ripe for replacement after a year or two. With electronic goods, economy of scale is everything when it comes to profit margin: a production line is hugely expensive to set up, but the marginal cost of each extra unit rolling off the line is tiny in comparison - so the more you make, the less significant the set-up cost becomes.

This means that, until recently, companies like Apple have been able to maintain a track record of ever-increasing profits and offer ever-increasing power without having to put up prices.

The problem is that, in the last 7-8 years particularly, technology just hasn't been progressing at the same rate, nor have exciting new applications appeared to make consumers upgrade hardware. Consider:

The Apple II was released in 1977. 7 years later the Macintosh was released - with a 68000 processor that was night & day more powerful than the Apple II's 6502 and a graphical interface that pretty much re-defined personal computing. Throughout the 80s and 90s a brand new computer felt like an antique 2 years later.

Now look at all the people still happily using their 2011 MacBook Pros 7 years later in 2018 - because although the new models are somewhat lighter and somewhat faster and have sharper displays there are no real game-changing differences (the closest thing to a game-changer is the switch SSD, and one of the "problems" for Apple is that its easy to stuff a SSD into a 2011 Mac).

Put simply, everybody who wants a computer or a phone already has one that its proving more than capable of doing the jobs we need. In fact, the rise of the internet means that a lot of the heavy lifting can be done "in the cloud" rather than needing a super-powerful phone/computer. The market isn't growing, people don't need to replace their old devices so often... There will still be people who need computers and phones, but the days of spectacular year-on-year growth for the firms that make them are coming to a close. What we're seeing now is the final "spasm" as companies try for a few more years of massive "growth" by wringing higher margins out of static/falling sales & introducing previously unnecessary "planned obsolescence". The bubble will burst at some stage - maybe not today, but soon (if I could predict exactly when I'd be too busy shorting stock to type this...)

On the bright side - fridges last forever, but apparently its still worth people's while to manufacture them, so there are business models applicable to "mature" technologies. However, shareholders who want windfall returns don't invest in fridges (unless, of course, they're internet-enabled ones).

Of course, if Tim Cook pops up with an "...and another thing..." that proves to be the next iMac/iPod/iPhone, all bets are off. So far, that hasn't happened (maybe the Watch is on a slow burn - but it looks to me like its becoming a niche product for health/fitness that may be a 'nice little earner' but probably isn't going to go exponential).

Apple has always been expensive. You pay more for great products.

As for expensive:

According to Wikipedia, the original Mac cost $2500 at the time. It wasn't that expensive compared to other complete systems with display and floppy drives. An IBM PC system (with floppy) cost thousands, too.

The big success of the Mac in the publishing industry (without which the Mac would have gone the same way as the Amiga, Acorn and all the other technically superior-to-PC but non-Wintel platforms that we've forgotten about) was down to Apple producing the first affordable laser printer/local-area-network combo.

The original iMac (again, without which Apple probably wouldn't have made it to the millennium) was also an "economy" Mac.

I remember when buying a Mac Pro in 2006 that it was competitively priced with similarly-specced workstation-class PC systems.

So, no, Apple stuff may have always been premium-priced, but it hasn't usually been over-priced. They're also, increasingly, relying on old models to provide the "entry level" (e.g. iPhone 8/7/6, MacBook Air, Mac Mini) rather than designing new entry-level products to attract new customers (c.f. the original MacBook & Mac Mini and original iMac).

As for "great products" - when it was iPhone vs. "feature phone" (or the early incarnations of Android) or Mac OS vs. Windows 9x then Apple had a night-and-day advantage over their competition. Today, the distinction is far, far less: you may prefer iOS/MacOS over Android/Windows (I'd agree) but if you don't think current implementations of Android and Windows 10 are credible competitors - or don't see that they now incorporate most of the "unique selling points" that Apple had in the past - then you're in denial. That "night and day" difference has been eroded to "somewhat nicer".

 

[CalBoy]

I felt this way briefly when I upgraded this year from an iPhone SE to the XS. I think it has more to do with the psychology of the $1,000 price point and price variation than any other material factor.

In objective terms, Apple's profit margin on the X/XS is actually lower than it was on the iPhone 5; the components are substantially more as a percentage of the retail price, and Apple has earmarked a lot more support for phones today than it did in 2012 (each iteration of iOS has gradually supported more older models, such that today it's not crazy to expect a iPhone to last up to 5 years).

The iPhone X and XS are quite frankly 99% the same as the SE I just upgraded from in terms of their utility in the real world, but they are laying the groundwork for the next phase of the tech in my opinion. This phase is going to play out over a longer period of time, and not everyone will need the "latest and greatest" which is one of the expectations that was created with the iPhone during the last several years: the price gap between the "bargain" unit and the flagship was not substantial, but now it is. An iPhone 7 can be picked up for $450, which is objectively far cheaper than any iPhone before it when taking into account inflation, capabilities, etc. An iPhone XS Max is more than double this price at base storage, and three times the price when maxed out. This makes people feel bad because they feel they should have the best possible unit but don't want/can't afford the best.

I personally can easily afford to upgrade every year if I so desire, but I don't. I passed over the 7 because I thought the SE was a better value at the time and I think I made the right decision; if you don't think you can make use of the features in the XS line, then don't upgrade. Wait until next year or get a 7, 8, or XR. Apple offers plenty of very good quality phones at price points far below $1,000, and one of the big reasons I've stuck with Apple over the years is their craftsmanship and support are second to none. You do get what you pay for.

 

[rbrian]

i think its just the exchange rate here.... Apple doesn't control that.

It’s partly that, but US consumers are also complaining. Also, other companies seem to manage to keep their prices low.

Show me a PC trackpad laptop at $600 is equally as good as a $2,000 Mac laptop's trackpad..?

My £700 Surface Pro has a touchpad just as good as my 2011 £800 MacBook Air. I can’t compare to more expensive Macs, because I can’t justify spending that much.

 

[BarbaricCo]

All I know that 10-20 years ago, here in south east Europe, Mac was mainly brought by tech enthusiasts and creative professionals/ small businesses for graphic, sound, video, architecture etc.

Macs were pricey but well worth or far ahead for the similar priced PC.
And they were always 30% more priced than in US.

No one else was using Mac.

Now time, only our clients are buying new Macs and the new iPhones. We can't afford it anymore and are in the second hand market for the Apple products to keep running our small workshops or are moved from Mac ecosystem like video editors and architects.