Without a doubt, your opinion is that iPhones are overpriced. But opinion stated as fact is still merely opinion, and opinions can be wrong. Someone may say the earth is flat; that may be their opinion, but they are wrong.
The fact is that 225 million customers found iPhones to be either underpriced or correctly priced for the value they received. Things are “worth” what people are willing to pay for them. The iPhones were worth the price asked, and they sold.
When Rolex charges $20,000 for a watch, is it merely expensive, or is it overpriced? Just because you can’t afford it—or can but still don’t choose to buy it because you don’t think it’s “worth it”—doesn’t mean it’s overpriced.
Sometimes complicated concepts are best illustrated through example.
Peaches cost a store $0.10/pound. Of course the shop has expenses, but they can cover all their costs if they sell them at $0.49/pound.
If the shopkeeper prices the peaches at $.50/pound and sells out the weekly delivery of 1,000 pounds in one day, the peaches are objectively underpriced. The shopkeeper only made $10.00, and will not be retiring anytime soon.
If the shop prices the peaches at $1.49/pound and sells out the weekly 1,000 pound order a few hours before the next delivery, objectively the peaches are not overpriced. They might be underpriced, but they certainly aren’t overpriced, as the entire inventory sold out. The shopkeeper is very happy this week with the $1,000 in peaches profit.
So this week, the shopkeeper decides to increase prices again, and prices the peaches at $5.49/pound. This week only 500 pounds are sold before the next weekly delivery arrives. Some customers didn’t buy any peaches at all, or bought fewer than normal. When asked why, these customers told the shopkeeper the peaches weren’t worth it; they were too expensive. Some even used the word “overpriced”.
Were the peaches too expensive? Yes, for some customers they definitely were. Those customers might have bought nectarines at $2.49 since they couldn’t afford $5.49 for peaches. But many customers did buy peaches, even at $5.49. When asked why they still bought peaches this week even when the price more than doubled, customers told the shopkeeper that peaches are delicious and they like them much better than nectarines. The peaches, even at $5.49, were still “worth it” and not too expensive in the least.
Were the peaches overpriced? Not at all. The shopkeeper pocketed $2,500—record profits, even though only half the weekly delivery was sold. Yes, they were expensive; even many who bought them told the shopkeeper they thought they were indeed expensive. But not so expensive that they didn’t buy them. Because peaches are delicious, and people love them.
