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

Discussion in 'Apple, Inc and Tech Industry' started by elmateo487, Aug 25, 2008.

  1. elmateo487 macrumors 6502a

    Jun 12, 2008
    Can someone PLEASE explain this logic to me.

    How can a company sell a brand new laptop, for 370 bucks!? With an 8 gig solid state drive, 9 inch screen, full sized keyboard, 512 mb of ram, and a card reader. Plus assembly, case and so on.

    AND we pay close to that or more for our iPods or iPhones!?

    That bull!! If someone could show me the cost of individual parts of an ipod i would be satisfied. But i apologize, that is just ridiculous.

    Either apple really does buy "Premium" parts. (from my experience that is NOT true. Besides their screens.)

    Or they are getting bad deals. (Highly unlikely)

    Or we are getting robbed.

    Is it because a laptop is bigger? And the parts are THAT much cheaper to find now?
  2. Pandaboots macrumors regular


    Nov 19, 2007
    Dallas, Texas
  3. donga macrumors 6502a


    May 16, 2005
    i think it's quality and consumer loyalty. we know that, in general, apple makes good products.

    you can't compare a netbook to apple laptops. a cursory glance at specs already reveals differences. also, os x is a consistently selling point.
  4. Ntombi macrumors 68040


    Jul 1, 2008
    Bostonian exiled in SoCal
  5. madrag macrumors 6502

    Nov 2, 2007
    it is more or less like hiring a senior consultant vs a junior consultant...
    the hourly price of both is remarkably diferent.

    Apple is more expensive because their design is superior and they have to charge for it (also the OS, the build, marketing, etc).
  6. GSMiller macrumors 68000


    Dec 2, 2006
    Apple caters to a niche market. It's like the same reason why Mercedes doesn't sell a $15,000 car, they're not targeting that particular demographic, therefore they don't need a $378 machine in order to remain competitive.
  7. G4DP macrumors 65816

    Mar 28, 2007
    Because we are all dumb enough to pay for it.

    I think thats a simple answer.
  8. sushi Moderator emeritus


    Jul 19, 2002
    Simple, they are different products so you can't compare directly.

    Guilty. :)
  9. GGJstudios macrumors Westmere


    May 16, 2008
    Actually Linux OS with Windows XP as an option. Plus, only a 1.6GHz processor and 512MB RAM and a microscopic 8.9" display. The SSD is only 8GB, no gigabit Ethernet, and the WiFi is only b/g... no n, and only 3 hours battery life! No wonder it's so cheap! It's too small to be useful and ridiculously underpowered. I'd rather have a Mac Mini! At least it would come with Mac OS X!
  10. nanofrog macrumors G4

    May 6, 2008
    Exactly. ;)

    You choose what you buy. No one's holding a gun to your head. :p
  11. wordmunger macrumors 603


    Sep 3, 2003
    North Carolina
    I can buy a ton of manure for $50, but an itty-bitty 10-carat diamond costs $5 million! Yet both are made primarily from carbon. What a rip-off!
  12. elmateo487 thread starter macrumors 6502a

    Jun 12, 2008
    So the answer is that Apple rips us off and everyone is fine with that?

    I see around these forums all the time. There is NO WAY IN HELL that "So and so product" will ever sell for 200 dollars. When they very well could be sold for that much, just it would be outrageous to what Apple normally does.

    P.s. i would not call an iPod classic anything NEAR a mercedes.
  13. richard.mac macrumors 603


    Feb 2, 2007
    51.50024, -0.12662
    HA! simply awesome man… awesome!
  14. yorkshire macrumors 6502a


    May 18, 2008
    Because if we want OS X, we have no other option than to pay what Apple charges, we can't go elsewhere as there's no competition. It's like when your on a plane, they charge you way over the normal price for drinks, because they no you can't go and buy from anywhere else, as your 30,000ft in the air.
  15. rosalindavenue macrumors 6502a


    Dec 13, 2003
    Virginia, USA
    I like mine a lot-- big capacity, great battery life, rock solid and durable-- if its not a Mercedes I'd say it's a least a Volvo. Solid quality & reliable, not flashy.

    Another problem with your comparison is price: I paid $250 for 80 gigs-- compare that to when I paid $499 for a 3G 30 Gig 4 years ago, with no color screen or click wheel. That's a pretty good price drop; one you'd not see with a Mercedes or a Volvo.

    I'd say its nowhere near a Chevy Zune.
  16. elmateo487 thread starter macrumors 6502a

    Jun 12, 2008
    That has to do with parts though. The price of parts. Hard drive space is something tangible, something someone can count on their fingers. Which is why Apple does EXACTLY what they just did in your case.

    Oh 80 gigs? Cheaper? What a bargain! And everyone still pays the high price.

    Trust me. I love my iPod. I wouldn't go another direction. But Apple eventually will bring their prices down. They will need too if they are not continuously innovative.

    The ipod classic doesn't run os x. Neither do ANY of the small devices. I am comparing the price margin of this laptop, and these handhelds. Where is the high cost in apple handhelds?

    Man. Its like 15 Zombies and a couple sensible people walked into this thread!

    They sell, we buy.

    Its like HELLO people! Are you thinking!? Is that actually logic!?
  17. dXTC macrumors 68020


    Oct 30, 2006
    Up, up in my studio, studio
    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?
  18. wordmunger macrumors 603


    Sep 3, 2003
    North Carolina
    To actually address the question at hand, Apple iPods are quite competitively priced. The equivalent 80 GB Zune is $249, just like the 80 GB iPod. You're not actually paying any more for the equivalent iPod. Sure, you can get a completely different product -- a flash-based computer, for around the same price, but you wouldn't take your computer for a jog, would you? What you're paying for is miniaturization. It costs more to get the same functionality in a smaller package.
  19. elmateo487 thread starter macrumors 6502a

    Jun 12, 2008
    just like i said

    "Is it because a laptop is bigger? And the parts are THAT much cheaper to find now?"

    I'd like to see, if anyone knows, the cut Apple makes from each ipod. What it costs them to make it.

    The socratic method, by the way, is the best way to get anyone to think these days. Including myself.
  20. wordmunger macrumors 603


    Sep 3, 2003
    North Carolina
    There are lots of breakdowns like this online. Here's one example:

    But the article is misleading. Their actual profit margin is not simply the retail price minus the component cost. There are other costs associated with these products -- research and development, marketing, shipping, project management, retooling factories, packaging, and so on. I believe Apple's overall profit margin is more like 30 percent. But you can easily find that online as well.
  21. duncanapple macrumors 6502

    Jun 12, 2008
    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.

    I dont think this makes anyone here a "zombie." Have you ever worn Nikes? Or any other name brand shoe? What do you think the PBOM on that was? Most of that cost was prob marketing. And there was probably a healthy margin in there as well.

    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.

    Okay, I'm done rambling....

    edit - and wordmunger above is also absolutely correct... you cant just look at the PBOM... there are other costs that far exceed the actual hardware... Nike, referenced above, is a perfect example. About $5 of plastic, leather, nylon, and rubber, and $50 in marketing lol.
  22. gnasher729 macrumors P6


    Nov 25, 2005
    Apple buys quality parts. Apple provides excellent service. And Apple makes a profit from the products it sells. Building a full computer into the tiny case of an iPhone or iPod Touch isn't cheap. All that added together, I think the prices are about Ok. And obviously nobody forces you to buy an iPhone or iPod Touch. Pick things you like, then choose what is best value for money for you.

    Thirty percent is "gross margin". If you take a product off the shelf, then you decide whether to put it back on the shelf or to go and pay for it, the difference between these two is the gross margin. Gross margin excludes the cost that Apple has whether you buy that one product or not, like development, running the stores, etc.
  23. kfordham281 macrumors 6502

    Dec 4, 2007
    Two words: Perceived Value

    You also can't compare a cheap laptop and an iPod. You're comparing two entirely different product lines and markets.
  24. Consultant macrumors G5


    Jun 27, 2007
  25. Sdashiki macrumors 68040


    Aug 11, 2005
    Behind the lens
    its always been true:

    You get what you pay for.

    This is more true with computers than anything else.

Share This Page