I've never understood that argument....
Sell 100 items at a $10 profit = $1000 profit
Sell 10 items at a $100 profit = $1000 profit
If Apple products were more reasonably priced, more would buy them. What happens when more buy them?
-Increase in accessory sales
-Increase in App sales
-Increase in related product sales
For instance. With reasonable pricing someone who normally would not have buys a MacBook. When the time comes to replace their phone maybe they get an iPhone because they want the integration. Maybe they buy an Apple Watch ect, etc, ect....
For sure. That's how prices are set. Those things are considered. Ultimately, Apple wants to make as much money as possible (since they are a profit driven organization). That might be on a per-item basis, or it might be on a per-customer basis. They would certainly be considering the "halo effect" of the various possible entry points into the Apple eco-system when setting pricing.
The general consensus on here is that they haven't considered these issues, and:
1) Apple sets an arbitrary margin of say 30% and prices accordingly, or
2) Apple sets the prices as high as they can due to greed.
Apple obviously have a marketing department who would happen to know a fair bit about how to market Apple products. They would analyze the market and price accordingly.
So which is the more logical scenario?
i) This trillion dollar company doesn't know how to market products.
ii) This trillion dollar company does know how to market products.
Obviously the latter. The machinations are not fully exposed to the general public obviously, but Apple setting the price of the MBA at US$1,199 (or whatever it is) is not "greed". It's a considered price point that factors in the customer acquisition strategy you highlighted above in order to sell the "right" number of MBAs. Apple certainly knows that a reduction in price on a per-MBA basis will increase the number of MBAs sold while resulting in a corresponding loss of margin per unit, but that's the strategy. Apple also has to consider the premium brand positioning. If Apple drops the MBA to $500, for example, they'd be out the door like hot cakes, but they would then cannibalize the sales of the Pro and other units and Apple would inevitably lose some of the "shine" that it has now as a premium positioned product. I'm quite sure that Apple has theorized how many current MBA owners will opt to replace their current MBA with a new MBA at various different price points.
To generalize, we don't buy Apple products because they're the best way of getting high performance computers on a $/Mb/s type basis (for argument's sake). We buy Apple products because we're ok paying more money for the hardware that other brands, but in return we get an experience that we value more than the experience with the other brands.
So it's a touch more complicated than "greed", and you hit the nail on the head that it's a complicated issues that would be looked at from multiple angles. Apple obviously does this. We know this because they're a relatively successful organization who have over the years had some fairly strong financial results.
The MBA doesn't appear to be the right fit for me, but that doesn't mean it's an ill-considered product launch. It might be
but we have to be careful about adding 2+2 and getting 2,495.
It comes down to marketing. Folks typically don't understand the economics behind it (and they're relatively simple) but then take buzz words (profit, margin, revenue) and run with them without understanding the real world implications.
Don't get me wrong, at $500 I'd be all over the MBA too. But my perspective and Apple's perspectives are not the same.
