Why Apple Products Are Getting So Expensive
- Articles, Blog

Why Apple Products Are Getting So Expensive


Hey guys, it’s Greg with Apple Explained. And in this video we’re going to explore
some reasons why Apple products are getting so expensive. Now you might remember a similar video I made
called “Why iPhones Are Getting So Expensive,” but I felt the need to make a video covering
the overall trend of price hikes that Apple has been implementing in almost every product
category, especially after the recent Apple Event in New York City. So this video topic was the first place winner
of last week’s voting poll, and if you didn’t get to vote, make sure you’re subscribed. That way the voting polls will show up right
in your mobile activity feed and you can let me know which video you’d like to see next. Now Apple has almost always had a reputation
of pricing their products quite a bit higher than their competition, and this premium cost
is commonly referred to as the Apple Tax. And it can be traced as far back as the original
iPod in 2001, which had a starting price of $399, or about $570 adjusted for inflation. And when compared to other hard drive-based
music players that sold for around $200, the iPod’s price was staggering. And when the iPhone was released in 2007,
one of its biggest criticisms was its price, coming in at $499, or about $600 today, and
that was with a two-year contract. And don’t forget the MacBook Air, which
debuted with a $1,800 price tag. And that got you just 64GB of solid state
storage. So the Apple tax is nothing new to longtime
Apple users, but there has been an unusual trend upward in almost all Apple’s product
categories over the past few years. And I think there’s more to that story than
the Apple tax can account for. So let’s start from the beginning. When did Apple’s products first begin creeping
up in price for no apparent reason? Well, the answer is debatable, but I think
it all started with Apple’s keyboard, mouse, and trackpad accessories in 2015. All increasing in price for the first time
without a clear reason. Apple’s Magic Mouse 2 cost 15% more than
its predecessor, the Magic Keyboard cost 44% more, and the Magic Trackpad 2 cost almost
90% more, jumping from $69 to $129. And keep in mind that the prices of Apple’s
mouse and keyboard had remained steady for many generations. So those big price bumps caused quite a bit
of backlash from Apple users who felt the company was aggressively nickel and dime-ing
them without much added value to their products. And if that wasn’t bad enough, Apple raised
the prices of their Mac accessories once again, for no reason other than their new space gray
color. So at that point, Apple set a precedent that
they wouldn’t hesitate to substantially increase the prices of their products just
because they thought customers would still pay for them. And that’s where it seemed Apple began testing
the price boundaries of different products, getting a feel for just how much their customers
were willing to pay. And 2015 was also the year Apple released
the $10,000 gold Apple Watch. Which only contained about 300-dollars-worth
of gold by weight. But what’s more bothersome are the recent
price hikes of base model products. Because sure, you could buy an aluminum Apple
Watch for $349, so the $10,000 gold model didn’t really matter to everyday consumers. But the base model Apple Watch price being
raised $70 from $329 to $399 is what really begins to price out a significant amount of
customers. And that’s exactly what happened with the
series 4 Apple Watch. And it’s the direction most of Apple’s
products are going. At their Special Event in New York City, Apple
announced some impressive updates to the Mac Mini, MacBook Air, iPad Pro, and Apple Pencil. But every single update was accompanied by
a price hike. The entry level Mac mini used to cost $499,
but now it starts at $799, which is kind’ve incredible considering it doesn’t include
a display, keyboard, or mouse. And the MacBook Air’s base price jumped
from $999 to $1,199. Which may be more of a justified increase
because of all it’s new features like the retina display, but it’s a significant price
hike nonetheless. But I think the iPad Pro had the most shocking
cost increase, raising 23% from $649 to $799. And that isn’t even considering the extra
$50 expense tacked onto higher capacity models. So that means the highest capacity 12.9”
Cellular iPad Pro model now costs $1,899. Easily breaking the $2,000 mark with taxes
and the optional AppleCare warranty. And you aren’t just spending more for the
iPad Pro itself, but you’re spending more for its accessories too. A similar situation to the one in 2015 with
Mac accessories. Because the Apple Pencil now costs $129, up
from $99. And the iPad’s Smart Keyboard Folio Case
has increased from $159 to $179. But perhaps one of the most surprising decisions
by Apple was to continue selling the now outdated 10.5” iPad Pro for the same $649 price. Instead of dropping the price like they’ve
done in the past. And leads me to my next point. How does this pricing behavior by Apple compare
to how they’ve priced new devices in the past? Because if you think back to the iPods and
even early iPhones and iPads, you’ll remember Apple very rarely increased the price of new
generation models. If anything, they tried to decrease the price. As I mentioned earlier in the video, the original
iPod debuted at $399, and when the last iPod classic model was discontinued in 2014, it
cost just $249. That’s a $150 drop over a thirteen year
period. And the MacBook Air’s price has been declining
since its release in 2008, but this year’s model marked the first price hike to the Air
in its 10 year history. And you can see this pattern in almost all
of Apple’s product lines. The iPhone debuted at $499 and now the supposed
“budget” model starts at $749, with the true flagship model starting at $1,000, significantly
more than its introductory price in 2007. But I should mention the 2007 iPhone was subsidized
so its true price was actually higher than $499, but still not as much as today’s iPhones. And when it comes to the iPad, it’s price
has soared from $499 in 2010, to $799 in 2018. So it’s clear Apple’s raising the price
of almost all of their products in an unprecedented way, but the big question is why? And if you try researching this you’ll find
all kinds of theories, ranging from high Chinese tariffs, to severe US economic inflation. But I think the real answer is much simpler. The reality is Apple has been facing sales
slowdowns across many of their product categories. The iPhone, iPad, and Mac are reaching maximum
market saturation. Which means there isn’t much market left
to expand into. And this has result in product sales peaking
in 2015, and slowing down ever since. In fact, Apple just announced they’d no
longer tell investors and analysts how many iPhones, iPads or Macs they sell. Instead, they’ll report how much revenue
they generate from each product category. This of course implies that even Apple isn’t
confident they’ll be able to achieve the type of sales numbers they had in previous
years. And this poses a problem. Because Apple is a for-profit company with
shareholders that expect healthy growth every single year. So if you’re Apple and product sales are
slowing down, how do you still ensure revenue growth? Well, you raise the prices of your existing
products. That way you don’t need to sell as many
units since you’re making more from each sale. And that’s exactly what Apple has been doing
over the last few years. Now this obviously could have some unintended
consequences. Because if Apple raises prices too much, they
could drive users to other more affordable platforms like Android or Windows. But Apple has an advantage here. Because most Apple users don’t have just
one Apple product. They have several. And that means they’re invested in an ecosystem
that is not only pricey to escape since you’d have to replace multiple devices, but really
inconvenient. Imagine trying to switch to Android after
having an iPhone, Apple Watch, and iPad. You’d need a new smartphone, smart watch,
and tablet. And they likely won’t work together in the
same way as iOS. So most people probably wouldn’t even know
where to begin when it comes to accomplishing the same tasks they’re used to in Apple’s
ecosystem. So if you look at Apple’s product lineup
as a business plan, you begin to understand how it’s designed to attract customers and
prevent them from leaving. Now I don’t mean to suggest Apple is the
only company doing this, virtually every tech company is trying to create their own ecosystem
to attract new customers. But I think Apple is the most effective at
it because they offer such user friendly products that integrate with each other seamlessly. But in order for this business plan to work
in Apple’s favor, it has to work in the users favor too. Because to convince customers to pay more
for their products, they need to offer even more value in return. If not, users will likely become frustrated
by the ever increasing prices and leave the Apple ecosystem en mass. So what’s Apple doing to give their customers
even more for their money? Well, they’re including some cutting edge
technology in their products that’s impossible to find anywhere else. For example, there isn’t any tablet on the
market that can compete with the iPad Pro’s multi-directional face ID, low latency & touch-enabled
Apple Pencil, powerful A12X Bionic chip, and beautiful true tone display with a 120Hz refresh
rate. And because there isn’t anything else like
it on the market, Apple is able to charge more than they ever have before. And if you think about it, that’s pretty
much what happened with the MacBook Air, original iPod and iPhone, and the first Retina MacBook
Pro that was really pricey at its release. They were products that offered something
unique that wasn’t yet available from any other company. And although this may not apply to all of
Apple’s higher priced products, it is an important factor that’s keeping Apple users
loyal to the company. And there are rumors that Apple’s creating
their own Netflix-like streaming service, but the exciting part is that the service
will be free for all Apple users. Which will add yet another incentive to buy
into and remain in Apple’s ecosystem. But there’s one more thing Apple has been
focused on in the past few years to differentiate themselves from their competition. And that is privacy. Most of us know that Apple has always taken
a hardline stance on privacy ever since the early days, but Tim Cook is promoting that
stance more than ever before. And I think it’s because Apple wants current
and potential customers to know that they aren’t profiting off their data. Which not only builds trust with users, but
helps justify the higher price of their hardware. So it’s become painfully obvious that Apple
is testing how high they can price their products without driving customers away, mainly due
to slowing sales of their existing products. And although many users appear to be accepting
today’s price hikes, who knows how far Apple might go to continue revenue growth year after
year. All we can do is hope we don’t get priced
out of the Apple ecosystem or forced to buy outdated technology for the sake of Apple’s
bottom line. So those are some reasons why Apple products
are getting so expensive, and if you want to vote for the next video topic, don’t
forget to subscribe. Thanks for watching, and I’ll see you next
time.

About Ralph Robinson

Read All Posts By Ralph Robinson

100 thoughts on “Why Apple Products Are Getting So Expensive

  1. Actually there is a bigger reason for the high cost. It has everything to do with phone companies using credit to finance phones. Essentially, the phones aren’t affordable for most Americans, but they are if they are financed. This has driven the cost WAY up.

  2. Iphone XI= 1999$
    Iphone XIs= 2499$
    Iphone XII= 2999$
    Iphone XIIs= 3999$
    Iphone XIII= 4999$
    Iphone XIIIs= 6999$
    Iphone XIV= 9999$
    Iphone XIVs= 14999$
    iphone XV= 19999$
    Iphone XVs= 29999$
    Iphone XVI= 39999$
    Iphone XVIs= 59999$
    Iphone XVII= 79999$
    Iphone XVIIs= 99999$
    Iphone XVIII= 149999$
    Iphone XVIIIs= 199999$
    Iphone XIX= 299999$
    Iphone XIXs= 399999$
    Iphone XX 499999$
    Iphone XXX 999999$
    Iphone C= 99999999$
    IPhone M= 9999999999$

  3. I think it’s just expensive because you don’t buy the product, you’re buying the name Apple.
    It costs around $450 to make an iPhone XS Max and they sell it for a Grand. Which is bullshit. I mean I know they have to make money but they can sell it for around $800-$900

  4. This is, because there are a lot of dump stupid fanboys paying anything Apple want to have. Mediocre hardware, but gold-price Apple want's.

  5. Same reason why everything is: inflation. Remember millionaires? They're what we used to call billionaires. Billionaires are not getting richer, our money is losing its value.

  6. Soon, they will make their own clothing line
    And a price for a frickin T-shirt will be £9999999999999999
    Ok you can tell I’m a Brit 😂

  7. Apple products are overprized. Macbook laptop is nothing else like PC, because their power pc evolution died without success, just only equipped in modern case, IOS, Mac OS is based on Darwin – Berkeley Unix (BSD) Stolen from open source – university code, 1500USD for phone, it's funny, people don't want to pay for it. If there are so many customers growing, the price of uniot must be cut off not rised up.
    I have sponsoring Apple for few years, it's time to change iPhone, change to what? Apple or Android? As technicians reports that build quality and also service repair quality of Apple products are very problematic. Louis Rossmann – repair technician many times reported about piece of crap from Apple products, their official repair service etc. You can search youtube for it.
    So why we need to pay bucks for nothing? As Apple rises prices, Huawei won't, thats begin battle between CHina and US cause of Huawei data protection, but main reason I think is political, US Government supports Apple and prevents from losing market despite of it's high prices. As we know, Apple got 30% sales decrease in first quarter. Who wants to take sponsorship of trillion worth company?

  8. I purchased the Iphone X the sales person told me I had to finance it which was a lie. Also it has been in the shop 3 times and replaced twice. My next phone will be an Android!

  9. Are prices increasing because they're not selling like they used to, or are they not selling like they used to because the prices are increasing? Either way creates a cycle of higher prices and dropping sales. I don't mind the high prices in the context of our times. We, as a society, have to grow up, and start understanding that the technology we have now doesn't need to be updated every 1 or 2 years. We're so materialistic that we want to be able to afford the new iPhone every year. If we keep throwing as much money as a company wants whenever they release a product that's only slightly better than what we have, when what we have would likely last us 4 more years, than we deserve to be taken advantage of. Learn to be grateful for what you have.

  10. i just buy Huawei, it has the same sort of UI as Apple, the gestures, but costs half or a tenth of the price

  11. The only product worth anything from Apple is MacOS. I will be buying a Hackintosh soon. A quarter the price and twice the performance. My next phone will not be an iPhone.

    A loyal customer but I'm not a sucker. I hope the company dies and MacOS is put in the public domain. Just like Sony being arrogant, Kodak, GM, and other heavyweights going down hard;; Apple needs to go down too.
    I know very few people that are planning to buy Apple products in the future.

  12. I can't really agree with the higher iPad prices.
    499$ in 2010 and around 350$ in 2019 for the base model…
    The other models are higher priced because of more features or Storage and better technology.

  13. That's why every apple products are incompatible with other platforms.
    It all makes sense.
    They are now forcing consumers to get stuck with apple even if the price hike is clearly unfair

  14. The greg here is a true Isheep
    If apple sells Tim Cook's shit for 500$,he would say this is because it has some unique bacteria.And no other microbs can grow in here.
    What the fucking wrong with you

  15. почему там написано на русском. А там английский язык.

  16. These people don't realize that apple is like the Cadillac or Lexus of phones that's why Android exist cuz it's cheaper

  17. not all apple products are expensive, i bought an ipad mini 5 for 450€ and i think it’s a very good price. i live in italy and for the same cost i could have gotten an samsung s5e which is absolute garbage in comparison, the a12 inside the mini is 4 times more powerful and the tablet is by far the fastest device i have seen in my life to date. by no means i’m a fan of apple, i would never touch an iphone and i’m using a samsung s10e as a phone, i’m just a fan of my pocket

  18. No shit their market drops cause they are cheapskates it costs maybe $20 to make a iPhone and bring up the price 300%

  19. If Tim Cook can make a software program then the price would probably be lower. Or maybe they want to get people away from Apple products and share the space with other products

  20. Privacy?? B.S. Then why was I tweezing my eyebrow one minute, & the next minute I pickup my iPhone and to my DISMAY…There are ads all over the Internet; Facebook, YouTube, blogs I read, etc. All about the latest in hair removal!,,… LOL I am not kidding you. They also have privacy policies that more or less tell us they are using our data and there are third parties yada yada yada ……ya know it all for our own good…to Share our data so we can have “a better experience”. Sure… They can try and differentiate all they want with their privacy crap but it’s total horseshit. George Orwell predicted this.

  21. Because they're greedy. Stop buying their shit and maybe it may force Apple to price their products at a more fair price. They have no reason to drop the price as people keep buying their shit.

  22. I reminds me of that episode of South Park where the people from San Francisco would fart and then sniff it up real fast and be like OO YEAH

  23. All of my cousins are so brainless and brainwashed they go with whatever is popular. My cousins have broken multiple apple products and keep buying them because they are popular. I literally had one basically call me poor for buying an android instead of an iphone.

  24. As an Apple fan and user, I do think that the prices are ridiculous. But people forget that Apple was created for business users, not for luxury

  25. this won’t fix their issue. The more they increase prices, the less people will buy them, which might lead them to increase even more to make up for that, which repeats the cycle

  26. Apple is like a cult so many people have drank the juice & now just want to have the latest & greatest regardless of what it costs them.

  27. I bought Apple for many years and was happy with my purchases. But their quality has denigrated, their products are now behind the times and their prices have gone through the the roof. So as each of my products die I'll buy something else which will be better performing for a fraction of the price. It's a no brainer

  28. Because their users are sheep, fine with being milked. Its like with all the apps where devs made same app for both Android and iOS, and the iOS version of same app cost ALWAYS 10 times more than the Android version. Free for milking, they are stupid. SImple as that 🙂

  29. 2027:
    Apple: we made this iphone 20 a whopping cheap price of 2000 dollars yup you heard that 2000 dollars and for the iphone 20s you need 2500 dollars truley a cheap price

    Btw i am not saying that i dont like apple i just dont prefer it

  30. apple don't care about people has less money they just want rich people buy there stuff, that's why I mostly stay on pc or LG phones. if apple keeps this up there going loss more sells

  31. They will come down if not apple will be out of biz more and more companies now are making better products for a cheaper price everybody talking about Steve Jobs being a innovator he stole a majority of the tech that put apple where it was IE suing a grocery store for putting a pic of a real apple on its store front like they own the apple and its flava yep apple con game finally caught up with it bye apple all great dynasties must die good riddance for stealing from your customers for all these years.

  32. I thought the iphone xr was cheap for 64 gb and guess what? I forgot about the damn tax, the tax for my area was 64.95 dollars which 749 plus 64.95 is 813.95. And then I realized it wasn't cheap anymore for 64 gb. -_-

  33. Apple have one word on their mind. MONEY. Make a £1000 iPad that can literally snap in half with not even that much force. Just take money out of everyone's pockets.

    This is why I stick with Android.

  34. Apple shot itself in the head as far as I am concerned. I was not a computer user until I worked in a school that was Apple based. I rapidly became one of it's biggest fans and often converted a lot of my friends over to Apple. Then the rot started to come in. Overnight I found all of my G4 & G5 computers were redundant and I had to upgrade to an Intel based iMac. Apart from the fact that it has got through 3 keyboards at the cost of £49 each I now find the keyboard cost £149 !!!
    What the !!! Apple.

  35. They are rich because of their advertising techniques and their ecosystem. As well as their add ones to force you to buy them (removal of headphone jack -> buy dongle)

  36. I’ve been an apple customer most of my life with especially the iPhone. I used to be able to afford the latest models every 2 generations of the device, I’m realising that iPhone has exponentially increased in price in the last couple of years, as I cannot a afford the jump from the iPhone 6s to the iPhone X, 11 as it has has out-priced me making me only to afford the iPhone 8 instead. Unless my financial circumstance change, I feel this will be my last apple device. Shame because Apple used to be available to far more people, but now it seems to be aiming for a luxury brand status joining the ranks of Rolex and Rolls Royce.

Leave a Reply to Jeremy Travis Cancel reply

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