How does Apple consistently sell at such a high price!?

[Scepticalscribe]

I wouldn't call >70% market share for the iPod and multi-million iPhone sales "niche". Apple has set the de facto standard for both music players and smartphones with their product lines.

However, responding to the OP, I wouldn't call the iPod/iPhone pricing "ripoff" either. Sure, we can purchase more raw computing power (such as the aforementioned Acer Aspire netbook) for less. But certain questions must be asked about any "competing" product...

• Is it as portable as an iPod/iPhone?
• Is it as nicely designed?
• Is it as elegant and intuitive to use?
• Is it as effective to do what you, the purchaser, intend it to do, right out of the box?

I agree completely.

I think the answer is what everyone else has already said. It really doesnt matter what the components cost. Its more about the value it creates for YOU. If you dont get $250 (or what ever value, depending on the ipod you buy) of value from the ipod, dont buy it. I personally, (and prob most that buy them) get that much out of the ipod. Keeping what used to be stacks and stacks of CDs in my pocket, and easily moving it all with me from my home stereo, to car, to computer, to friends house when having a party, is pretty cool.

Point is, with capitalism, a company is free to set any price it wants, and typically it is the balance of what the market will bear. I dont feel like I am being ripped off - its a consumer product, that no one NEEDS. To the victor go the spoils as they say... apple took a risk in sinking millions of dollars to develop these things, now they are rewarded with the profit. I dont know why so many people get bent out of shape about this? If they ever ask a truly unreasonable amount of money for an ipod, people will stop buying.
.

Again, I agree. Apple charge what they think we will pay. They can do this because the product is aesthetically attractive, beautifully designed and works very well (that fusion of form and function which best represents excellent design). Anyone who remembers destroying CDs while trying to master the awful Macromedia package will know the difference between a well-designed intuitive package, and something that is not. Apple can also trade on its very good reputation for customer support (generally well-deserved), and the quality of its products. All of this - over time - adds up to a reputation which will permit a premium price on their products. We choose to pay this when we buy - it is not compulsion, and not usually advertising, either.

P.s. i would not call an iPod classic anything NEAR a mercedes.

Here, I disagree with the OP. It is, [near a Mercedes] in that it is a design classic and is thus the standard by which everything else in that field is measured. Nothing else comes close. Cheers

 

[elmateo487]

I agree completely.

Here, I disagree with the OP. It is, [near a Mercedes] in that it is a design classic and is thus the standard by which everything else in that field is measured. Nothing else comes close. Cheers

That is easily disagreeable. It's in the eye of the beholder. For one, i will never EVER own a mercedes, BMW, or lexus. Because exactly thats what i am complaining about. They are ridiculously over priced and slow. Lucky for me though, i can afford 350 dollars for an iPod. But not 350,000.

CD players were hundreds of dollars, now they are 10 dollars. Have prices for those parts really dropped that much? No, they fell out of popularity. Hence the price drop.

Go ahead and buy a truck right now. You will get the best price you have ever seen a brand new truck go for. Because no one wants a gas hog.

Price is COMPLETELY subjective. It can be sold for less, always.

The only exception i've heard of that, are the millions of dollars sony lost by pricing their ps3's for virtually no profit.

I guess I'm wondering why we buy iPod classics, with slow unresponsive OS's, buffering problems, and poor quality sound output for such a high price.

I'm beginning to think the only reason i ever bought an iPod Classic was because i could get one with 160 gigs.

As for the Zombie statement? Hahaha. Yeah. I am just NOT a fan of people that walk in and just refuse to THINK, to turn their minds on! Like when you ask someone a question, and you receive the answer. "Because"

 

[GGJstudios]

If you don't like the prices that Apple.... or any other manufacturer.....charges for its products.... DON'T BUY THEM! Our free enterprise system allows any company to charge what it wants, unless it's a regulated industry. There are restaurants that charge $200 for a $40 bottle of wine. If that bothers you, don't buy the wine at that restaurant.

It's up to each company to decide what it wants to sell and how it wants to price its products. It's up to each consumer to decide if those prices are fair and reasonable, in that consumer's opinion. If they aren't, the consumer has the choice NOT to buy. Whining and complaining that a company doesn't make what you want, or doesn't price things the way you want, demonstrates immaturity and a naiveté about how the business world and commerce operates.

 

[aristobrat]

I guess I'm wondering why we buy iPod classics, with slow unresponsive OS's, buffering problems, and poor quality sound output for such a high price.

"For such a high price" is relative. Anyone buying iPods over the years would find the new classic to be more of a value than prior models...

$399 = 5GB first gen iPod
$399/$499 = 10GB/20GB second gen iPod
$299/$399/$499 = 10GB/15GB/30GB third gen iPod
...

Crazy. Apple dropping prices while still innovating the product.. (bigger sizes, new UI, etc...)

 

[Scepticalscribe]

At the risk of reiterating a few points, I'll post again. Companies which manufacture well-made products, with high production standards, attractive design sensibility, which combine form and function, - i.e. look good and work well, - offer good customer service, and fill a need in the market/lives of customers - perceived, real, or manufactured by advertising - can afford to charge a premium price once they have built up their reputation for being able to provide a quality product.

The iPod is a case in point. No amount of advertising, PR, spin, or sheer desirable "fashionability" would have sold the vast volume of iPods that have been sold. They sold because of advertising, yes, but also, more importantly, because of word of mouth, and the fact that - by contrast with what else was available - they were far better at what they did. Thus, they have become the benchmark against which everything else in that field is measured, which is what makes them classic. They have compelled every other company in that area to up their proverbial game, or sink without trace. And we choose (and are not compelled) to buy. One chooses to buy for the perceived value of the brand.

Are they perfect? Of course not. Are there flaws in the design? Naturally; the forum is full of threads wailing about battery life and death, to take one flawed feature. Obviously, they can be improved, and I imagine, will be improved as the design evolves. That is the nature of design, and technological evolution. For my part, while I love the old Citroen DS (the one you see in 1960s and 1970s French movies) and it was utterly revolutionary in its day, I have to concede that bland modern mediocrities on the raod far exceed it for safety, comfort, and spec. Such is life. But one can still admire a classic in any era, and in any field.
Cheers.

 

[txhockey9404]

They are actually not charging that much more than companies that make similar products. Here is an example:
Apple iMac 20" 2.4ghz + Wireless Mouse and Keyboard + Additional GB of RAM from Apple = $1349

Dell XPS One 20" 2.2 ghz + Wireless Mouse and Keyboard +2gb RAM + Vista Home Premium + 250gb HD + Antivirus = $1299

So, a $50 dollar increase to go from the Dell to the Apple. I would take the Apple if I did not need a Windows only program.

Another Example:
Apple Macbook (base model) 2.1ghz + 2gb of Apple RAM + 160gb HD = $1249

Dell XPS M1330 +2.1ghz processor + Wireless N + Bluetooth + Virus Protection + Roxio Creator 10 (to take the place of iLife) = $1197

So, again, only $50.

So Apple products are not overpriced by more than $50 to $100, and they are competitive in their segments. It is NOT fair to compare a Netbook to a Macbook or even an iPod or iPhone because they serve different purposes. You wouldn't use an iPhone to use the internet for extended periods of time or write a paper or presentation. You also wouldn't carry a Macbook to listen to music or take calls. You wouldn't do heavier computing on a Netbook. You wouldn't store your iTunes library on a Netbook with 8gb of flash. It's not much more than an oversized, folding iPod touch. So they each have their own uses, and they cannot be compared.

 

[bigjnyc]

simple economics 101....

you want a laptop running windows? you walk into an electronics store and you have a whole row of choices, different brands, different configurations, different sizes etc... all these different companies want you to buy their laptop so what do they do? the price it competitively and are constantly trying to undercut the competition.

you want a laptop running OSX? you want to jump ship and explore this new hype going around and get a "Mac"? well first of all there are only certain places you can go to get it, second only one company offers it, they dont have to compete with anyone so they can set their prices wherever they want.

yes apple products have great design and great quality and OSX is wonderful.... but at the end of the day it all comes down to simple economics.. no one else is offering an alternative for what you have to sell, and you have a great marketing team so people want your product... Then you can pretty much set whatever price you want, there is alot of disposable income out there so people will buy. theres also alot of credit card debt so even without disposable income people will buy.

 

[elmateo487]

"For such a high price" is relative. Anyone buying iPods over the years would find the new classic to be more of a value than prior models...

$399 = 5GB first gen iPod
$399/$499 = 10GB/20GB second gen iPod
$299/$399/$499 = 10GB/15GB/30GB third gen iPod
...

Crazy. Apple dropping prices while still innovating the product.. (bigger sizes, new UI, etc...)

Thats what i said. Hard drive space should be the LAST place we look to see how innovative our iPods are. The prices of hard drives have significantly dropped, with no drops in prices of iPods.

When ipods came out, to buy a normal hard drive it was $6's a gigabyte.

Now it is what. 13 cents.

If you do the math, according to your logic, the newest iPod should be 46 times better than the 2nd generation iPod.

I guess my point is it is a GIVEN that an iPod should naturally keep it's prices, while getting significantly better each year. Or it should drop it's prices. Each year prices drop on all components. So if we see nothing new to the iPod but a larger hard drive? At the same price in a couple of weeks? I will still buy one, there is no other competition. It is the best player that fits my needs. But i wont be happy unlike millions of other Zombies.

 

[elmateo487]

So, a $50 dollar increase to go from the Dell to the Apple. I would take the Apple if I did not need a Windows only program.

Another Example:
Apple Macbook (base model) 2.1ghz + 2gb of Apple RAM + 160gb HD = $1249

Dell XPS M1330 +2.1ghz processor + Wireless N + Bluetooth + Virus Protection + Roxio Creator 10 (to take the place of iLife) = $1197

those were poorly choosen examples.

HP Pavilion DV2940SE 14.1-inch Laptop (2.10 GHz AMD Turion X2 TL-62 Dual Core Mobile Processor, 4 GB RAM, 320 GB Hard Drive, DVD Drive, Vista Premium)

$855 Same processor, wireless, bluetooth. Twice the ram, twice the space. 400 dollars less.

And yeah yeah yeah i know. Now people will say. BUT YOU ARE GETTING A MAC! That was not the point of this example.

 

[aristobrat]

I guess my point is it is a GIVEN that an iPod should naturally keep it's prices, while getting significantly better each year. Or it should drop it's prices. Each year prices drop on all components. So if we see nothing new to the iPod but a larger hard drive? At the same price in a couple of weeks?

I guess I don't understand the root of your point.

I'm sure that most everyone here would love to see ANY manufacturer make a new model with significant new features and sell it with a price drop, but what manufacturer does that?

I mean, to your point, yes -- they all theoretically *could* do that, just as you could theoretically could offer to work your job for a lesser wage because your component cost of living decreases each year as you pay off your debt.

On another note, raw component prices may fall yearly, but other costs involved with getting the product to the shelf don't. Labor costs don't typically decrease. Fuel costs for transportation definitely haven't decreased. I doubt advertising is any cheaper. So I'm not sure you should just focus on cheaper component prices being the sole point for a product being sold cheaper.

 

[gcmexico]

because it runs windows

*
exactly to some extent...it's the whole package that raises the price, not just the parts...everything parts, OS, style..etc

 

[rweakins]

obviously it's fairly simple. you pay for quality and you definitely get it. apple has loyal customers that know what they want and what they're getting when they buy an apple product.

 

[javiercr]

you are not getting robbed, they have a product and a price, you can decide to buy it or not to buy it. If you don't think it's good value by the netbook and be happy

 

[Hawtoldman]

Justification for iMac pricing?

How can apple justify charging 1.1k for a system with Radeon HD 2400 XT, 1gig of ram and 2.4ghz core duo in an imac.

What kind of profit margins are we seeing here? Or is it because you get a bonus 1ghz of mac user experience

 

[Eidorian]

If you're that concerned about hardware specifications then please build your own computer.

You're already ahead of most users being able to grasp hardware specifications.

 

[Mindflux]

A lot of PC's have subsidized costs (like Cellphones). All that preloaded garbage, such as the AOL installer and product demos like MS Works, Quicken and all that help bring the cost of your PC or Notebook down.

A few manufacturers, Sony comes to mind allows you to buy without the preloads and in turn you pay something between $130-200 USD more for it.

Granted $200 dollars isn't going to make a 300 dollar notebook cost as much as a Macbook, but you see what I'm getting at?

 

[aristobrat]

I think the OP is specifically focused on the price of the iPods not dropping each year even though the components of which they're made cost less and less each year.

 

[Hawtoldman]

If you're that concerned about hardware specifications then please build your own computer.

You're already ahead of most users being able to grasp hardware specifications.

I have built my own computer, coincidently for $1 more than the iMac I quoted. Funnily enough, the memory is quadruple that of the imac, 600mhz more powerful (its actually 1.6ghz more powerful. PC's allow you to do this magical thing called overclocking). 4 times more gfx memory and is generally more awesome than the imac in everyway.
And there is only one bad thing about the pc compared to the imac: it has a little bit bigger footprint. But that's ok, since I have enough room.

Also, before you say "O BUT CAN IT RUN OSX?". Yes. It can. http://www.osx86project.org/

 

[Eidorian]

I have built my own computer, coincidently for $1 more than the iMac I quoted. Funnily enough, the memory is quadruple that of the imac, 600mhz more powerful (its actually 1.6ghz more powerful. PC's allow you to do this magical thing called overclocking). 4 times more gfx memory and is generally more awesome than the imac in everyway.
And there is only one bad thing about the pc compared to the imac: it has a little bit bigger footprint. But that's ok, since I have enough room.

Also, before you say "O BUT CAN IT RUN OSX?". Yes. It can. http://www.osx86project.org/

I've done the same with my Q6600 system. I don't see a need to create threads about it though.

 

[t0mat0]

I think the OP is specifically focused on the price of the iPods not dropping each year even though the components of which they're made cost less and less each year.

You've got to take into account that the internal components are changing year on year - that or the quantity via space HD or RAM GB updates.

People can and do buy at that price - they're a high end market in the main. It's like asking how Bentley or Ferrari or Aston Martin can sell cars at such a price - there is a market for them, plani and simple. Isn't it common knowledge the term badge price? The excess you pay in some cases just to have the name? Fashion is a great example. Apple does have this in part, but then you're also getting the software, that only runs on their hardware (barring hackintoshes). Like it or lump it, that's the way it is.
like for like, don't also forget Apple service, Apple support, returns, the advice, the QC, the QA, and the ability to actually get a decent price when reselling it on.
Yes you can put together a rig that's cheaper. But if your time is actually worth anything, you've spent more time (i.e. money) getting it set up than just buying a Mac. Upgrade the HD, RAM etc, but it does seem actually cheaper on the whole to just buy a prepackage. If you want to monkey about, he most moddable is the Mac Pro i'd imagine. Horses for courses

 

[GGJstudios]

How can apple justify charging 1.1k for a system with Radeon HD 2400 XT, 1gig of ram and 2.4ghz core duo in an imac.

What kind of profit margins are we seeing here? Or is it because you get a bonus 1ghz of mac user experience

Apple can charge anything they want for what they sell. They don't have to justify it to you or anyone. If you don't like their prices, don't buy! And their profit margins are none of your or anyone else's business!

Some companies sell stuff for more, some for less. Wal-Mart sells some things cheaper than the local grocery store or the local convenience store. So what? People who are concerned about price shop at Wal-Mart. People who value other things shop elsewhere. Grocery, clothing and convenience stores don't have to justify their prices or reveal their profit margin. If you want it cheaper than they sell it for, go to Wal-Mart!

If you're complaining about Apple's prices:

• You're naive about how business works and about supply-and-demand
• You don't have a clue about Apple's internal structure, financial modeling, business strategies, expenses, vendor pricing, or future plans.
• You have many options to buy cheaper (in every sense of the word) products elsewhere. That's the benefit of free enterprise. You have choices.
• You need to buy from Apple OR buy from someone else OR don't buy at all!
• You're NOT going to change anything that Apple, or any other company, does by whining and complaining like a child.

 

[Mousse]

It's been said through out the entire thread but some folks still can't wrap their heads around it: Apple charges whatever the market will bear. If people are willing to pay for a $3000 Mac, then Apple will charge $3000.

Saying something has to be sold at a low price because it cost of manufacturing is low is absurd. A prime example are stamps and paintings. The famous four stamp block of the 1918 'Jenny invert' stamp (the inverted biplane stamp) sold at an auction for nearly 3 Million US dollars back in 2005. How much did the cost to make? What's the cost of the paint and canvas that produced the Mona Lisa? What would you pay, IF it were for sale?

So why did a four stamps, that cost pennies to make, sold for nearly 3 million? Because someone was willing to pay that price for that product. The same logic applies to why computers, cars, food and so on. I'm positive that Mona Lisa would require the GNP of a small nation if one where to buy it.

 

[GGJstudios]

What's the cost of the paint and canvas that produced the Mona Lisa? What would you pay, IF it were for sale?
I'm positive that Mona Lisa would require the GNP of a small nation if one where to buy it.

... and it doesn't even have Bluetooth? Waaaaahhhh! Boohooo! Someone should MAKE them sell the Mona Lisa for $15 or less! That's how much other pictures at Wal-Mart sell for! What's their profit margin? They shouldn't be allowed to sell it for more than the cost of the paint and canvas! It's not even digital! I can get a newer painting with high-tech, non-fade colors for a LOT less than that! They have no right to charge more! They should change their pricing because there are a LOT of college students they could be selling to, if they just lowered the price! It's not fair! Boohooo! Waaaaaahhh! ~sob~ ~whimper~ ~whine~ ~pout~.......

Sounds silly, doesn't it? And before anyone starts with "but computers are different than art..." NO, they're not! They're products, pure and simple. Different purposes, yes. But still subject to supply and demand and competition and the freedom to charge whatever the seller wants to charge.

 

[nando2323]

those were poorly choosen examples.

HP Pavilion DV2940SE 14.1-inch Laptop (2.10 GHz AMD Turion X2 TL-62 Dual Core Mobile Processor, 4 GB RAM, 320 GB Hard Drive, DVD Drive, Vista Premium)

$855 Same processor, wireless, bluetooth. Twice the ram, twice the space. 400 dollars less.

And yeah yeah yeah i know. Now people will say. BUT YOU ARE GETTING A MAC! That was not the point of this example.

Dude you are not comparing Apples to Apples AMD Turion processor is not the same as a core2duo. It's like you're comparing a 2.0l hyndai engine to a 2.0l bmw engine yeah they are both 2.0l engine's but one is of much higher quality and performs much better. I have had many custom built PC's with AMD chips in them, and I can honestly say that they do not compare to Intel in performance at least as far as the lower end stuff goes.

Here's a link to a comparison of the core duo vs the turion 64 x2 and it doesn't even keep up on a lot of stuff, and barely beats some stuff and that's against a core duo forget a core2duo.

http://www.tomshardware.com/reviews/amd-dual-core-laptops-arrived,1305-14.html

 

[theBB]

those were poorly choosen examples.

HP Pavilion DV2940SE 14.1-inch Laptop (2.10 GHz AMD Turion X2 TL-62 Dual Core Mobile Processor, 4 GB RAM, 320 GB Hard Drive, DVD Drive, Vista Premium)

$855 Same processor, wireless, bluetooth. Twice the ram, twice the space. 400 dollars less.

It is not the same processor. AMD's mobile processors are not as good as Intel's offering lately. I bought a similar HP laptop for my parents, as they only use it for simple office tasks, internet, email and for storing pictures. Saving a couple hundred dollars made sense, as the extra features I'd get with a Macbook did not seem justified to me. However, in the end it felt clunky to use, so I would not make the same decision for myself.

Is the wireless 11n or just b/g? Is Vista's inefficiency going to make your computer run as fast as OSX on 2GB RAM. Similar story with hard drive, HP used up 40GB of the hard drive even after trying to get rid of all the junkware they put in there. In that case, is it fair to compare just the hardware? Is it as quiet, as this is usually not listed as a spec? If these are issues that does not matter for you, then go with the cheaper option, but no they are not the same thing.

Besides, even the lousiest chip in computer has a data sheet with multiple pages. You cannot compare them based on just one number. Even when they claim to meet certain standards such as Bluetooth or WiFi, these certifications are usually based on just one sample. This sample is supposed to be "typical" out of the factory, but a lot of vendors play games by hand tuning and selecting their best chip. A good computer company therefore asks for above and beyond what the certification asks for and they end up paying more for better performance. Of course, this does not prove whether Apple or Sony actually uses better chips than let's say some no name manufacturer or Dell. However, my personal experience and anecdotes I hear from my friends in the industry makes me believe so.