The Apple Laptop,Cell phone, Tablet and headphones together cost more than $3,500. Apple products have never been cheap and in the cost of some of its products has increased dramatically over time. Just look at how the price of the iPhone has increased over the years. When started at $499 in 2007 now starts at $999.
So what makes these products so pricey. Well some say it boils down to no other reason than the fact that Apple can convince us to pay the Hefty price. There's even an official term for this phenomenon. It's called the Apple tax which describes the extra money customers are willing to pay for an Apple product over a competitor product with similar features and often. It's attributed to the so-called cool Factor associated with apple. It's those premium prices that helped catapult Apple into becoming one of the world's most valuable companies and at the start of 2019 it announced it was holding a whopping 245 billion dollars in cash reserves. But, Apple argue customers quite paying a premium for a reason.
In 2018 Apple's CEO Tim Cook defended the company's most expensive iPhone yet saying cook It's the most advanced iPhone we've ever done pointing out. It had replaced the need for other devices like a camera video recorder and music player. He argues creating quote the most Innovative product available is quote not keep to do and apple will never sacrifice quality for price. So all that money are shelling out for your new iPhone is at least in theory helping to fund future Innovations. Like it Innovation is what helped Apple earned its stripes.
IPhone have both been routes as products that change the world when the original iPod came out in 2001 it cost $399 a staggering price for a personal music player at the time Apple aggressively marketed the iPod as a device that can store one thousand songs in your pocket all of this at the cusp of the digital download revolution in less than six years. Apple announced more than 100 million iPods have been sold making it the fastest selling music player in history.
In 2005 Apple announced its annual profit brought up 384 percent largely due to the Smashing hit of its new digital music player. Its profits would continue to grow through to 2012 for a lot of those customers the iPod would become the first of many Apple purchases. So ultimately that $399 purchase would make them more inclined to not just potentially buy new versions of the iPod but ultimately to buy an iPhones, MacBooks, iPads and apple watches. The iPhone which debuted in 2007 would ultimately replace the iPod and this was responsible for even more impressive growth worldwide shipments of the iPhone increased year on year until it reached its peak of 231 million in 2015. That's more iPhones than there are people in most countries, but now there's some concern around apples ability to continue innovating and even some signs that it's growth and Industry dominance is under pressure.
You see apple hasn't been able to surpass that iPhone Peak ever since and profits have begun to fluctuate to so why the peak well, it's part of a larger Trend we're seeing across the entire industry the lifespan of a smart is getting longer which means customers are upgrading the new technology or phone they use too. As a publicly traded company Apple is expected to grow for its shareholders and one possible way to combat declining sales is simply to raise prices that enables it to have higher profit margins.
In 2018 the price of the base Apple watch went from $329 to $399 and don't forget the time it tried to sell the Apple gold watch for $10,000 and Analysis in 2017 found that the iPhone X cost 25 percent more than the iPhone 8 to make yet it retailed for 43% more according to one firm the iPhone X cost 357 dollars and 50 cents to make but since it sells for $999 that gives it a gross margin of 64 percent. In recent years to help grow its business Apple has made it a priority to grow sales in the world's most populous country China had met with some success. It also faces serious competition, ironically the sheer expense of Apple products has hurt sales in countries like China. India Brazil and turkey emerging The company desperately needs to keep growing premium. Smartphone prices have been rising across the board but compared to its competitors. In China iPhones cost a lot take for instance the iPhone 10s Max it cost close to 1400 dollars in China.
An economic slowdown into the mix and it's no surprise that in mid 2018 Apple's iPhone felt third place amongst the list of world's most popular smartphones. That's when Chinese Tech Giant Huawei past it just look at the percentage change in Apple's share of the smartphone market compared to its competitors that same year Apple announced it would no longer report units sold of iPhones which Wall Street interpreted as a likely sign of more declining sales.
At the end of the day most experts agree that Apple needs to come up with new Innovations and not just raise prices in order to hold on to its place as one of the world's most valuable companies.
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