Err, you being an Apple user presumably, you realise that the lower marketshare higher profit comes by price-gouging people like you who have sufficient disposable income not to care about the higher cost of the iPhone.
Huh? Gouging?
Lets see what the actual definition of gouging that pertains to buying (and not digging) :
(a) overcharge, surcharge
(b) fleece, rob, soak, rip off. take you for a ride , take you to the cleaners
(c) to extort (obtain by coercion, intimidation, or psychological pressure)
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Variant (a) Would be true if Apple's clients would not be getting their money's worth (that's how you know a product is too expensive).
Variant (b) Would be true if Apple sold something fraudulently bad.
Variant (c) Would be true if Apple used coercion or intimidation to sell its products.
Satisfaction for Apple products are very high and sales increase so (a) is out (along with the ridiculous b or c). So, no gouging by definition.
For someone with more disposable income, many aspects have much more value to them than the cost of the phone (that's why sales don't decrease when price increases : demand is inelastic). So, for them, the cost versus value evaluation is quite different than it is for someone with less money. For them, time, after sales service, brand cachet, durability, security, simplicity, peace of mind, privacy, etc, may trump any monetary consideration.
That's why for them, a high price is not gouging... They are getting enough value from what they spend on their phone. That's all that matter.
Reasons for Apple demand being inelastic to pricing
- No substitute goods (Apple is not like the rest)
- Relatively low percentage of income in their target markets
- Brand loyalty (Built by creating an unique USP)
