Pinterest MobileAppPage Stumbleupon Whatsapp
Ads by Google

Apple famously sells its hardware at a premium Why More People Would Use Mac If It Cost The Same As Windows [Opinion] Why More People Would Use Mac If It Cost The Same As Windows [Opinion] I'm writing this on a Windows PC for one very good reason - Macs are too damn expensive. If only Apple was to lower the price of its full range of Mac computers then everyone... Read More . It could afford to sell its products for much less money, with teardowns consistently revealing there is little justification for the prices in terms of the cost of manufacturing Macs and iDevices. But the company chooses not to do so.

The reasons for this are many and varied, and differ depending on who is expressing their opinion. The fact is Apple could cut its prices, but whether it should do or not was the subject of last week’s We Ask You discussion.

The Apple Tax = A Taxing Question

We asked you, Should Apple Cut Its Prices? A fair number of you answered the question, giving opinions ranging from, “Yes, definitely,” to, “No, of course not,” with a, “Who bloody cares??” included for good measure.

The majority of people suggested Apple should indeed cut their prices, despite the perception that higher prices equal better products. Sure, you generally pay for what you get To Buy The New Mac Pro Or Build Your Own? The Answer Might Surprise You To Buy The New Mac Pro Or Build Your Own? The Answer Might Surprise You Is the new Mac Pro reasonably priced when compared to a PC you can build yourself, or is the “Apple tax” in full effect? Prepare for a shock. Read More , but Apple seems intent on adding an extra layer of expense even on top of that.

There are already signs of Apple subtly adjusting its pricing strategy. The iPad was a lot cheaper than many experts predicted. The iPhone 5c iPhone 5c Review And Giveaway iPhone 5c Review And Giveaway At this year's iPhone event, Apple announced not one, but two new iPhones, a first for the company. We are giving away an unlocked 16 GB green iPhone 5c to one lucky winner. Read More was a (failed) experiment at releasing a slightly cheaper smartphone. And the price of the latest MacBook Air Twitter Is Flatlining, Firefox 29 Is Radical, MacBook Air Is Cheaper [Tech News Digest] Twitter Is Flatlining, Firefox 29 Is Radical, MacBook Air Is Cheaper [Tech News Digest] Twitter flatlines, Firefox updates, MacBook Air cheapens, Xbox One lands, Udacity expands, and Vsauce measures. Read More has been cut by $100. But these are small changes taking years to enact.


Ads by Google

Apple is cash-rich and has no need to panic in terms of cutting prices. However, its worldwide market share isn’t all that impressive, boasting around 15 percent of the smartphone market and just 8 percent of the computer market. To increase this market share Apple needs to add new people to its existing userbase, and price cuts are an obvious way of doing so.

The question then is, does Apple want to increase its market share? If it sees itself as the Ferrari or Rolex of consumer tech then probably not, and certainly not if it means cutting its prices to compete with what Cupertino sees as inferior competition.

To conclude: Apple could its prices quite easily, Apple should cut its prices if it wants to grow, but Apple won’t cut its prices all the while it sees itself as a premium brand appealing only to those with money to burn.

Comment Of The Week

We received a lot of great comments, including those from Imaduddin Sawal, Peter F, and jamieg. Comment Of The Week goes to Robert O, who won with this comment Should Apple Cut Its Prices? [We Ask You] Should Apple Cut Its Prices? [We Ask You] What level of permanent discounting would make you more likely to go out and buy an Apple product over a rival brand? Read More :

I think that a large part of Apple’s “cult” appeal is in its “elegant” status, and therefore they can’t cut prices (too much) without affecting its brand.
This might come as a shock to some of you younger techies, but Apple has always been an expensive brand, and as an “old guy,” I’ve always resented them for it. Back in the 1980?s, there were 8-bit computer platforms that easily outperformed the Apple II (namely the Commodore 64 and Atari 8-bits) on most levels, but Apple continued to successfully charge triple the price of competing platforms, largely on “brand.” This “Apple tax” continued into the 16-bit era, to namecheck the Commodore Amiga and even (arguably) MS-DOS platforms.
However, I do have to (in retrospect) concede that Apple has been a positive force in the tech industry, pushing the personal computer, windows/mouse interface, MP3 players, and smartphones into the public arena. Without the Apple II, what would the 8-bit computer world have looked like? Without the Macintosh/Lisa, what would the 16-bit era (and beyond) have looked like? Without the iPhone, what would the “smartphone” era have looked like? Or the “tablet” era?
Perhaps by purchasing an Apple product, you’re actually investing in the next step in technological evolution. Thank you, Apple fans, for when the competitors’ products start mirroring your advancements, the general “poor” public can enjoy your innovations at much lower prices!
So should Apple lower its prices? No! Let the competitors lower theirs! Then the masses can afford it!

We chose this comment because it offers a balanced view on the question of Apple’s pricing strategy. Although the premium pricing caused this guy frustration for many years, he can now see how Apple’s investment in R&D has helped push technology to the next level. At which point we all benefit, Apple fans 8 Essential Twitter Accounts For Apple Fanboys 8 Essential Twitter Accounts For Apple Fanboys I’m not an Apple fanboy myself but I do know a few. They don’t deserve the treatment they receive, and have done throughout history. They’re still human, and still people who need love and attention... Read More or not.

We Ask You is a weekly column in which you have your say about a particular subject. We ask you a question each week, with the results compiled and compressed into a follow-up article the following week. This column is nothing without your input, all of which is valued.

Image Credit: Angelo DeSantis via Flickr

  1. Andrew
    January 8, 2015 at 3:57 pm

    Typical UK question from someone who has never owned a business. You charge whatever the market will bear. A business has an obligation to its shareholders to return a profit. Lowering the price would mean more sales but destroy the brand. Also it would cause more costs in servicing and responding to more phones. You need yourvhead examined to suggest.this.

  2. Arielview99
    May 20, 2014 at 3:11 pm

    I love apple products and always have - should they lower? It would be nice but probably won't happen. I like their stuff because It's nice to have a laptop that is 5 years old work - with no bugs or bother. It's only recently that I had to purchase more ram - but everything has been fine. My only big complaint is I can't play video games on the Mac :(
    My sisters 8 year old mac desktop finally dies last week. We cried together, but she realizes she can't afford a new one on her teachers salary. So in a perfect world sure they would lower the price, or offer some sort of discount for teachers - but if they don't we'll just have to suffer through.

  3. john3347
    May 16, 2014 at 3:21 am

    If Apple wants any of my money, the are going to have to compete with others on price. I am not willing to pay an Apple tax of any amount. Show me a product that does three times what a competitor does and I MIGHT be willing to pay three times the price for it.

  4. Robert Martin
    May 14, 2014 at 5:50 pm

    Most goods are priced at "what the market will allow." In other words, as long as people will pay the high price, there is no reason to reduce it. Thus more money for the stockholders.

    Apple, like many large US corporations is very tax-savy and avoids paying US income taxes on much of the profits. To do so, Apple keeps about two-thirds of its worldwide profits ($34.2 billion in 2011) in Ireland, an "offshore tax haven," where they pay zero income tax to Ireland or the US. They did pay $3.3 billion in US income taxes on the one-third of their profits not sheltered in Ireland. That amounted to an effective tax rate of approximately 10% of the total profits, while the US corporate income tax rate is 35%. In an April 2012 article, the New York Times reported that Apple was holding $74 billion offshore.

    So, yes, they can certainly afford to lower prices, but do you really think their shareholders would allow it?

  5. Suleiman
    May 14, 2014 at 2:06 pm

    "So should Apple lower its prices? No! Let the competitors lower theirs! Then the masses can afford it!"

    These are the most brilliant statements i read thus far on this topic . Congrats on your win, Robert O wonder !!

    • Ken E.
      May 14, 2014 at 2:49 pm

      Agreed! Robert O's comment is a bullseye.

  6. Dridots
    May 14, 2014 at 3:15 am

    It would have been nice when they changed from a 30 pin connector to the lightning. To charge $30 for it was ridiculous. All those old chargers clocks and speakers are now worthless and there was absolutely no apology or even a cost reduction for the new connectors. That was shameful and still has a mark on it's brand. Let them charge whatever they want but I can see some change coming with the amount of competition out there now. All these phones pixels screens size. They are almost all the same. So if they want to charge an extra premium. Let them. They still make the best products out there and should be compensated. Now with the new Windows 8.1 HTC M8 Sonya new phone samsung Galaxy and new competition from China and now Amazon. It's a tuff market and I wish them luck. It's been my phone forever but I am really starting a hard look now of what I might buy if the next Apple doesn't smash the elephants in the room

Leave a Reply

Your email address will not be published. Required fields are marked *