Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Or maybe the ratio of costs to selling prices have remained steady for cutting edge technologies. If it were milk or toasters we were talking about then I could understand your implication that input costs should not be increasing and perhaps even be going down. But Apple is doing the same thing today as it was doing 10, 15, 20 years ago; developing new products with increasing performance and capabilities. Seems that will always remain the same percentage of total costs.
I hear you, except that price increases are accelerating compared to the past. Why are costs so much higher lately than they used to be?
It may well be that this is just how much it costs to make fancy-pants computers now. I'm neither qualified nor adequately informed to offer an opinion about what Apple should or could do. All I'm saying is the current approach is moving the income level required to be an Apple user even higher. Our middle-class household can no longer afford the products we used to buy on a three-year cycle. Maybe I need to just accept that and walk away. I hope not, though.
Price increases in the Mac product line represent the move to higher performance in the components for SSD, TB3, screen density, etc while achieving the size and weight desired for that product line. The cost for software development increases because the OS is more complex than it was.
Thus margins indicate that costs have increased and not profits.
Also, the needs of most middle-class households can now be met by iPads or lower tier Macs rather than 6 core i7 15" MBP. The downside to the product line is that the direct replacement for a MBP from 3 years ago has a smaller screen but likely also costs less.
Apple still provides the iPhone 7 at $449 when talking about iPhones. The iPhone 8 is $599. The three year old iPhone 6s was $649 at launch. The 8 is a solid upgrade at $50 less than your $649 replacement budget. The Xr costs $749 but is 6.1"...so it's a worthwhile stretch if you want to go that route and the same price as the 6S Plus. So if your phone was a 6S Plus in 2015 the Xr is a direct replacement at the same price.
There's just this extra tier above the tier that you purchased in 2015 and there isn't a smaller option anymore.
That you don't like the upgrade path doesn't mean that Apple has priced it out of the range of a middle-class household. If you could afford a $649 phone every three years in 2015 you can afford a $599 iPhone 8 in $2018. The Xr should be $649 next year if the pattern holds and be an excellent replacement for a 3 year old iPhone 7.
Call it "gaslighting" but the complaints are simply entitled bullshit. There's no "acceleration" in price increase. The replacement for the 6S Plus is the Xr at the same price point. There wasn't a replacement for the 6S but a viable replacement is $50 less expensive than the 6S was in 2015. The Xs is a higher tier product than the 6S was.
6S->7->8->Xr
Your entire argument is horseshit.
You can't charge more for more performance otherwise every product in existence is an order of magnitude better than previous products. Automobiles are much faster, fuel efficient and safer than past vehicles. By your distorted, stunted argument every Toyota Corolla or Honda Accord should ship for 80,000 "cuz look how much better they are!". Computers increase in performance over time. Their prices increase relative to pv calculations and inflation fluctuations. They might also increase as Wurthele astutely indicated because they have some intrinsic cost (ie support or services). However products shouldn't cost more just "cuz betta". That's nonsense because by definitions computers ard phones are *better* than the previous model. Otherwise, what would be the *point*?
Did you really go there with a car analogy? Because that's just stupid. Are you so clueless as not to realize that people complain about how cars are more expensive than before? There was a time that they cost under $10K.
Try googling "cars too expensive" and see how colossally stupid it was to use that to try to bolster your position.
And more importantly they are not "charing more for more performance". They are charging the SAME or LESS for more performance. The iPhone 8 is $50 cheaper than the 6S was at launch and much much faster. That the 6S was the most expensive tier in 2015 is immaterial. The Xr is the 2018 replacement for the 2015 6S (Plus). Just like the 8 was the 2017 replacement for the 7. That the X and Xs are two new premium tiers above the old line didn't make the old line more expensive.
Both the 8 and the X had an A11. Both the Xr and the Xs have an A12. None of the phones cheaper than the 6S had the A9 as the 6S in 2015.
I just compared a Xs Max 512GB $1449 to a Note 9 512GB $1249, Apple’s premium is 16%. For that you get premium material (all glass, stainless steel), superior security, processor, screen among others. Noting that Samsung supply themselves with the display so it costs them less. Why doesn’t Samsung get some of this criticism?
I don‘t know about the US, but in Germany Samsung sells the Note 9 with 512GB for 1249€ while Apples iPhone Xs Max 512GB can be had for 1649€. The prices outside the US are outrageous as Germany is not even really bad off. In other countries the differences to the US prices are even bigger. So your example just goes to show Apple is rightfully being criticized - at least outside the USA.
Except you can't compare hardware to hardware -- because with the Samsung you get a free OS that's worth every penny. With the iPhone you get a great OS with ongoing virus protection and a plethora of Apple Ecosystem and services. They aren't equivalent -- even if they have similar hardware specs.
One can prefer iOS as I do. I do not own any Android product whatsoever - and still criticize Apple for a pricing policy that keeps the Apple community from growing.
I will do the Math for you: 1649€ includes 19% VAT, so net price is 1385.71€. Converted it amounts to 1561$. That is still 112 $ more than in the US. And that premium isbeing paid by none-US customers everywhere. Hard to be an Apple customer in Europe and not come off like somebody who likes being taken advantage off.
CE has always been cheaper in the US than in Europe. If prices where the same globally everyone could be traveling to the country of choice, where an iPhone or whatever is the cheapest, which would result in terrible economic consequences.
What? If prices were the same people would travel to where the iPhone is cheapest? That makes no sense at all.
The lowest end Mini has an i3 that trades with a 2400g...a 150 dollar CPU. Hardly a world beater in an 800 dollar computer.
The DDR4 in a Mini isn't 3200. It's 2666 which is fast by Mac standards but isn't even the fastest on the market.
The only great part about the Mini is the fact that it's:
A. Small & stylish in a nice aluminum box with excellent heat management through shared blowers, proper air routing, software cooling profiles and thermal skin dissipation.
B. It has that insane motherboard design with fantastically forward thinking IO (thunderbolt-enabled USB-C ahoy!).
Beyond that, you mentioned it. It uses IGP. The issue isn't whether Mini purchasers need it. It's whether Apple charges people like the Mini *has* that grunt. Which it doesn't have.
A 2400g, some fast RAM, a nice PCIE SSD on a mini ITX would be about twice the size. Sure. And no Mac OS X. And you'd lose 2 or 3 USB C ports. But you'd also chip 400 dollars on a computer that could tie the Mini on half the tasks and run rings around it on the other half.
Again, Mac OS is the best OS on the market. Apple hardware engineering is great. But is it worth 100% markup great? I wonder. They're charging the same that a Dell with a Core i5/twice the fast RAM/and a GTX 1060 costs. And those two systems aren't even in the same solar system, much less planet.
So yeah. Mazda. Ferrari. Fits.
The NSX used the engine from the Legend Lamborghini and Audi collaborated on the V10 engine used in the Gallardo and Huracan. Pagani Huayra uses a Mercedes V12 engine. Aston Martin Vantage uses a Mercedes V8 The Lous Evora uses a Toyota engine.
The i3 Mini you are whining about is faster than the 2017 15" MBP Core i7-7920HQ in single core and faster than the 2017 21: iMac Core i5-7500 in multicore.
That leads me to believe you know very little about supercars or computers.
I just compared a Xs Max 512GB $1449 to a Note 9 512GB $1249, Apple’s premium is 16%. For that you get premium material (all glass, stainless steel), superior security, processor, screen among others. Noting that Samsung supply themselves with the display so it costs them less. Why doesn’t Samsung get some of this criticism?
Because Samsung is raising their prices piggybacking on Apple. It still cold comfort to people who don’t care that much for those premium materials at those prices. Some people are on tight budgets. It’s Apple’s prerogative to move upmarket, but not everyone wants BMWs and Mercedeses, even if they could afford them. Then, there’s the perception issue too. If people feel like they get ripped off, even if they’re not, you’ve got a problem. At the end of the day, this is grumbling while some people realize that going forward, if they want the latest Apple tech, they either have to borrow to buy it, or buy used or refurbished, and hold on longer to it. So Apple is just dropping the “affordable” from “affordable luxury”.
You can get a top end iPhone and pay it off over 24 months with zero interest. Or you can get last year’s model for half the price and do the same thing. Now figure how many cups of coffee you could make at home instead of buying at a coffee shop per month to afford one. I’ll wait.
Just look how much Jobs invested back versus how much cash has piled up since he died.
Steve was interested in product improvement, not in real-estate, luxury, or extreme wealth as such.
He warned against greedyness, and almost anything the current leadership prioritizes. Pioneers shouldn’t be compared to milkers anyway
The data doesn't support your supposition.
Then please explain where those hundreds of billions come from, and what percentage of earnings became invested back over the years. The problem is your micro-economic approach to macro-economic issues
We've discussed this ad infinitum over the last five years. Your problem is your own micro-economic approach, meaning Apple not directly appealing to you anymore as a customer in a shift in focus to a different product line, to a macro-economic issue. On a per-unit basis, Apple is making no more money as a percent of what it costs the company to make under Cook, than it did under Jobs. The difference is the stunningly higher user base that the company accumulated.
I understand where you're coming from, but you're conflating several different issues.
My approach is macro. I’m not looking at cost prices or margins, which is impossible because the prices they get at their volume are their best kept secrets. I point at the immense cash reserves accumulated AFTER SJ and where that got directed to. You seem unable to clarify those metrics from your micro-economical analysis and you avoid the questions I asked about them Whether or not their portfolio is appealing is an entirely different subject - that has nothing to do with wealth attribution. It’s not me who is conflating that.
I didn't avoid them, we've been writing about it for five years. Feel free to browse the history. A quick check of Apple's cash reserves back to 2006 shows that Apple had a proportionate stash to earnings for that entire time. Yes, even under Jobs, so to say that this is exclusive under Cook isn't accurate.
The explosive cash reserve trend shown at https://www.statista.com/chart/5605/apples-cash-holdings/ pretty accurately illustrates what you avoid to mention: accumulated wealth that did NOT flow back to customers (the sole contributors) in the form of either investments, innovation, price/performance improvements, dividend or goodwill. That different perspective by Cook (priority: money) and Jobs (priority: product) did benefit just Apple, in lieu of most other stakeholders: It is fair to say Cook derived more money from indeed many more customers, but severely fell behind with transferring added value to his original customers (who never asked for volume but for top quality and an up-to-date product portfolio, ref. Jobs era products conforming to Moore’s law). In relative terms, Cook also left investors in the dark (=> compare stock price to wealth accumulation during his reign) but it is fair to say that Jobs wasn’t a great fan of dividends either. Cook’s extreme expansion (/milking) strategy will cease to be sustainable when saturation arrives in the single product category Apple made itself dependent on. This is what makes fund managers very nervous - and not reporting sales numbers is only making that worse. The lean and mean machine has become the massive, incumbent moloch, that it used to parody itself in 1984, where customers typically don’t benefit from. And with lots of additional (stock related) risk that can become unmanageable, even for Cook.
Marginal analysis has a lot of flaws that weren't taken into account in this article. For starters, MA assumes that items of comparable cost are taken into account, then the margins should match.
Except that the average starting phone price today is higher, vis a vis salary increases, than the original iPhone-iPhone 5.
Additionally, the average starting price for an Apple computer is also higher, for some models, vis a vis salary increases, than comparable models of just 3 years past. (ie: Mini, Air...et al.). That is, unless you think pv money conversions should increase by 50% on just a scant 4.5 years? No, of course not.
That is going to leave a relative sense of increased cost (and rightly so), when people have to dip into their own pocketbooks more, to reach for the same class products, even if such products were proportionately profitable to Apple. This cognitive dissonance makes sense, because Apple is in fact choosing a higher economic target market (or in the iPhone X-XS case...shifting the market).
Moreover, remember that as a whole, percentages represent disparities linearly. A constant percentage on higher sales will produce more money. A constant percentage on higher cost products will produce higher profits. If you price all your products 50% more expensive, even at comparable profit percentages, you'll make more money.
IE: 40% profit off a Mac Mini (for example only, since the markup for the Mini is much higher than 40%), that costs 500 dollars, is approximately 200 profit.
A 40% profit off a 700 Mac Mini will produce 280 dollars in profit. Shifting the market towards the higher price, forces customers to choose between the Apple product/ecosystem and an increased 80 profit increase (which is a relative 40% increase over the last profit... or a shift to a competing Windows platform.
If Toyota kept their Camries profits at a constant 15% but raised the price from 25550 to 30550, their profits would increase, even as their marginal analysis would remain constant.
Remember that iMacs were initially sub-1000 machines. Minis were significantly cheaper just a scant few years ago and apple laptops like the Air cost only 1000, compared to almost a 20% increase today. These are all intentional choices by Apple. Not accidental.
Apple isn't a money-grubbing enemy but they're not cherubs. They're more expensive...and they know it.
Food for thought.
Here's the thing, right? We've got equivalent profit margins, but in the heady Jobs days, Services wasn't even a thing and contributed far, far less to the company's bottom line as a proportion to the whole. So, we're actually dealing with lower hardware margins than in the late Jobs era, offset by much, much higher contributions from Services to maintain the percentages. This whole thing is just another another bogus and logically fallacious "this never would have happened if Steve was alive" thing.
And, nobody said that Apple was angelic, or inexpensive.
I don't doubt that the stores and services/support or free OS all contribute to costs.
But unless you can conclusively prove that those costs offset an average 40% price increase across the board for most of their products over the past five years alone, I'm going to assume that their price increases are a conscious effort to undermine the public perception that their growth has slowed.
Which it has.
As a side note:
Over the past five years alone:
iPhones have increased 40% in avg price. Base model Mac Minis have increased 50% in avg price. (higher spec models are even more) Airs have increased 20% in avg price. MBPs have increased 20% in avg price.
And this is only off the top of my head.
If you're affirming that Apple is spending that additional money entirely on support, I'd love to see it. It's more likely they're *pocketing* more of it, which goes back to supporting all the point Lorin, I and so many others have made.... Apples are more expensive today than yesterday and that profit margin on a far more expensive product...produces MORE profit.
Go look up the price for the original MacBook Air. We’ll wait.
Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Or maybe the ratio of costs to selling prices have remained steady for cutting edge technologies. If it were milk or toasters we were talking about then I could understand your implication that input costs should not be increasing and perhaps even be going down. But Apple is doing the same thing today as it was doing 10, 15, 20 years ago; developing new products with increasing performance and capabilities. Seems that will always remain the same percentage of total costs.
I hear you, except that price increases are accelerating compared to the past. Why are costs so much higher lately than they used to be?
It may well be that this is just how much it costs to make fancy-pants computers now. I'm neither qualified nor adequately informed to offer an opinion about what Apple should or could do. All I'm saying is the current approach is moving the income level required to be an Apple user even higher. Our middle-class household can no longer afford the products we used to buy on a three-year cycle. Maybe I need to just accept that and walk away. I hope not, though.
It's worse than that. Not only are the products quickly escaping low-mid middle class household budgets but high-mid household budgets and even low-wealthy households are hard pressed to justify the cost.
Example.
I'm in the market for a next-gen iMac. I'm looking for the 2019. A Core i7 is fine. I'm sure they'll have 8th-9th gen in there by then. I'm sure they'll have 16 GB of DDR4. The screen is spectacular and that's ok. Storage is fine. But a lot of my work (3D modeling and real-time texture rendering) requires a beefy graphics card and the current 580 I have is good (but not great). I expect the new iMac to have 1080-class performance 2 years after the RX 580 iMac. At least 1080.
Let's assume that by virtue of the fact that Apple refuses to contract with NVidia that AMD is the only supplier they have (which Soli thinks they probably also develop nyuk nyuk). The 680 isn't ready yet. And if it isn't ready by next May-June on iMac release, Apple may just shove another 580 in the high end non-Pro iMac. Well, that means I'm looking at the same performance as the 2017 model for 2500-3000 dollars. Ridiculous.
My point is, it's not just about the price eliminating middle-tier families from purchasing Apple products (although that's likely to happen) but also shooing away professionals and prosumers that can get Wintel systems at the same price that, no, may not run Mac OS but are literally 100% faster. We can see that situation plain as day with the new Mini.
It's not that Apple is simply more expensive than ever before. It's that they seem to offer less than ever before for those high prices.
I like that you’re already angry about products that aren’t even announced yet. And you wonder why people are being referred to as “haters”.
Btw I would assume the next iMac will have Vega GPUs given the MBP gets those this month. But stay angry.
Is this report talking about gross margins or profit margins? Do you have a comparison of average selling prices over time?
Meaningless to to this discussion. When Dodge started selling the 12-cylinder Viper it would have had a positive effect on ASPs. But it offered a lot more power and sportiness. Apples latest iPhones offer a lot more performance and capabilities versus previous generations. You’d expect ASPs to climb. Gross margins is where the comparison should lay, and this article does a good job pointing out how they have not significantly moved during Cook’s tenure.
The 2010 MBA had more performance and capabilities than the 2008 model but it was cheaper. Same with the $329 iPad compared to the original. Anyone who doesn’t see that Apple is offsetting slower/flat unit sales growth with price increases is blind. New flagship iPhones used to start at $649, now they’re $999. Now you can argue the XS is $350 better than 6 was, that’s obviously subjective but it’s still more expensive. Take the new Mac mini. Starts at $799. The previous entry point was $499. Again, one can argue that the new mini is way better and deserves the $300 price increase but the bottom line is you used to be able to get into the Mac ecosystem for $499 and now the cheapest entry point is $799. The previous entry point to iPhone was the $399 SE. Now the cheapest entry point is the $499 7. And the cheapest iPad used to be $259; now it’s $329. In the past you could get an Apple TV for $99; now it’s $179. It costs more to get into the Apple ecosystem that’s just a fact.
It’s not appropriate to cast the comparison the way you have. Like saying the entry level cancer cure in 1950 was les expensive than today’s entry level cancer cure. These are different things you are comparing. I use an extreme example to illustrate my point.
As for being blind, I could accuse those who aren’t willing to acknowledge that Apple could certainly juice units sales year after year by simply designing and developing iPhone models spanning lower price tiers, as other vendors have done. How popular would be a 6” OLED iPhone priced at $400? Pretty popular, but Apple would make no margins on such a model. So it’s not that Apple is reacting to slower/flat unit sales. It’s quite the opposite; Apple has deliberately decided to go farther up market in capabilities, performance, etc, and at significantly higher prices. Slower/flattening unit sales is a result of that strategy, not the reason for the strategy. You see, those who aren’t blind can see that it’s acually the opposite of your characterization.
I don’t agree, or at least don’t agree that it can only be one or the other. I highly doubt that Apple would intentionally try to slow unit growth. Going “up market” allows Apple to still post record financials even when sales have flatlined. But for how long? How long can they keep increasing prices to offset flat to declining sales?
Again, missing the point. Of course Apple hasn’t intentionally slowed sales. The company has intentionally continued to outpace competitors in technology, performance, etc, and is charging prices appropriate to those accomplishments. Knowing that that might flatten unit volumes is different than intending for it to do so.
Marginal analysis has a lot of flaws that weren't taken into account in this article. For starters, MA assumes that items of comparable cost are taken into account, then the margins should match.
Except that the average starting phone price today is higher, vis a vis salary increases, than the original iPhone-iPhone 5.
Additionally, the average starting price for an Apple computer is also higher, for some models, vis a vis salary increases, than comparable models of just 3 years past. (ie: Mini, Air...et al.). That is, unless you think pv money conversions should increase by 50% on just a scant 4.5 years? No, of course not.
That is going to leave a relative sense of increased cost (and rightly so), when people have to dip into their own pocketbooks more, to reach for the same class products, even if such products were proportionately profitable to Apple. This cognitive dissonance makes sense, because Apple is in fact choosing a higher economic target market (or in the iPhone X-XS case...shifting the market).
Moreover, remember that as a whole, percentages represent disparities linearly. A constant percentage on higher sales will produce more money. A constant percentage on higher cost products will produce higher profits. If you price all your products 50% more expensive, even at comparable profit percentages, you'll make more money.
IE: 40% profit off a Mac Mini (for example only, since the markup for the Mini is much higher than 40%), that costs 500 dollars, is approximately 200 profit.
A 40% profit off a 700 Mac Mini will produce 280 dollars in profit. Shifting the market towards the higher price, forces customers to choose between the Apple product/ecosystem and an increased 80 profit increase (which is a relative 40% increase over the last profit... or a shift to a competing Windows platform.
If Toyota kept their Camries profits at a constant 15% but raised the price from 25550 to 30550, their profits would increase, even as their marginal analysis would remain constant.
Remember that iMacs were initially sub-1000 machines. Minis were significantly cheaper just a scant few years ago and apple laptops like the Air cost only 1000, compared to almost a 20% increase today. These are all intentional choices by Apple. Not accidental.
Apple isn't a money-grubbing enemy but they're not cherubs. They're more expensive...and they know it.
Food for thought.
Here's the thing, right? We've got equivalent profit margins, but in the heady Jobs days, Services wasn't even a thing and contributed far, far less to the company's bottom line as a proportion to the whole. So, we're actually dealing with lower hardware margins than in the late Jobs era, offset by much, much higher contributions from Services to maintain the percentages. This whole thing is just another another bogus and logically fallacious "this never would have happened if Steve was alive" thing.
And, nobody said that Apple was angelic, or inexpensive.
I don't doubt that the stores and services/support or free OS all contribute to costs.
But unless you can conclusively prove that those costs offset an average 40% price increase across the board for most of their products over the past five years alone, I'm going to assume that their price increases are a conscious effort to undermine the public perception that their growth has slowed.
Which it has.
As a side note:
Over the past five years alone:
iPhones have increased 40% in avg price. Base model Mac Minis have increased 50% in avg price. (higher spec models are even more) Airs have increased 20% in avg price. MBPs have increased 20% in avg price.
And this is only off the top of my head.
If you're affirming that Apple is spending that additional money entirely on support, I'd love to see it. It's more likely they're *pocketing* more of it, which goes back to supporting all the point Lorin, I and so many others have made.... Apples are more expensive today than yesterday and that profit margin on a far more expensive product...produces MORE profit.
There it is, in a nutshell. You just said it all. Over the past five years the prices of Apple products have climbed. This is THE CAUSE, not the effect, of flattening unit volumes. Duh! When will people see this the right way around? Apple’s efforts to stay ahead of the competition on performance, capabilities/features, etc, and charging higher prices appropriate to that better performance, is what has led them into an even more premium space, and the effect of that has been, yes, you sell fewer units at those higher prices.
The opposite narrative, which many are trying to push here, is that Apple was seeing softening demand years ago and so decided to raise prices to soften it some more. Ridiculous for two reasons. First, it flies in the face of economics. Second, unit volumes were, for most of those last five years, climbing. And that second bit of detail blows away anyone’s argument that Apple raising prices is a reaction to softening demand. Ludicrous.
Example: Apple introduced the 6/6+, both larger than previous models, and raised the prices of both. More money for more phone. That year was called a super cycle because Apple had never offered such large screen iPhones prior, and so not only did Apple sell as many iPhones at higher prices as they had sold smaller iPhones at lower prices the year prior, they actually sold more. But raising prices while increasing unit volumes is not sustainable, unless there’s some very significant new capabilities/features that come along with the higher prices, like those 6/6+ larger screens the market had been waiting years for.
Apple continues to outpace the competition on capabilities/features/performance, at even higher prices, but not every year is a super cycle, or should be expected to be. Just maintaining flat unit volumes is already an achievement at these higher prices. What this suggests is that, at lower prices, Apple WOULD sell more units. But the narrative that seems to exist is that at any price Apple unit volumes are flattening off, ignoring that fact Apple has raised prices for years as the cause for unit volumes flattening.
Marginal analysis has a lot of flaws that weren't taken into account in this article. For starters, MA assumes that items of comparable cost are taken into account, then the margins should match.
Except that the average starting phone price today is higher, vis a vis salary increases, than the original iPhone-iPhone 5.
Additionally, the average starting price for an Apple computer is also higher, for some models, vis a vis salary increases, than comparable models of just 3 years past. (ie: Mini, Air...et al.). That is, unless you think pv money conversions should increase by 50% on just a scant 4.5 years? No, of course not.
That is going to leave a relative sense of increased cost (and rightly so), when people have to dip into their own pocketbooks more, to reach for the same class products, even if such products were proportionately profitable to Apple. This cognitive dissonance makes sense, because Apple is in fact choosing a higher economic target market (or in the iPhone X-XS case...shifting the market).
Moreover, remember that as a whole, percentages represent disparities linearly. A constant percentage on higher sales will produce more money. A constant percentage on higher cost products will produce higher profits. If you price all your products 50% more expensive, even at comparable profit percentages, you'll make more money.
IE: 40% profit off a Mac Mini (for example only, since the markup for the Mini is much higher than 40%), that costs 500 dollars, is approximately 200 profit.
A 40% profit off a 700 Mac Mini will produce 280 dollars in profit. Shifting the market towards the higher price, forces customers to choose between the Apple product/ecosystem and an increased 80 profit increase (which is a relative 40% increase over the last profit... or a shift to a competing Windows platform.
If Toyota kept their Camries profits at a constant 15% but raised the price from 25550 to 30550, their profits would increase, even as their marginal analysis would remain constant.
Remember that iMacs were initially sub-1000 machines. Minis were significantly cheaper just a scant few years ago and apple laptops like the Air cost only 1000, compared to almost a 20% increase today. These are all intentional choices by Apple. Not accidental.
Apple isn't a money-grubbing enemy but they're not cherubs. They're more expensive...and they know it.
Food for thought.
Here's the thing, right? We've got equivalent profit margins, but in the heady Jobs days, Services wasn't even a thing and contributed far, far less to the company's bottom line as a proportion to the whole. So, we're actually dealing with lower hardware margins than in the late Jobs era, offset by much, much higher contributions from Services to maintain the percentages. This whole thing is just another another bogus and logically fallacious "this never would have happened if Steve was alive" thing.
And, nobody said that Apple was angelic, or inexpensive.
I don't doubt that the stores and services/support or free OS all contribute to costs.
But unless you can conclusively prove that those costs offset an average 40% price increase across the board for most of their products over the past five years alone, I'm going to assume that their price increases are a conscious effort to undermine the public perception that their growth has slowed.
Which it has.
Of course hardware growth has slowed. The entire smartphone and computing market in all aspects is contracting. Notably, however, depending on segment, Apple's either holding its own with no loss of ground, or slowing less than everybody else from a units shipped perspective.
Are you sure Apple is bucking the trend on UNITS shipped, or is it in revenue dollars?
If it's the former, it means people are still buying Apple stuff.
If it's the latter, it means fewer people are buying Apple products but that's offset by higher prices.
I was under the impression that we don't really know how many units Apple actually moved, and growth assessments are being made based on revenue reports. I could be wrong, though. It's been known to happen from time to all the time.
It is bucking the trend on units shipped and revenue dollars.
And especially bucking the trend on units shipped when you consider how much they’ve been able to raise prices without turning negative in units shipped.
Consistent gross margins don't tell me anything about changes to the affordability of products. One doesn't need to be a financial analyst to figure out that the price of a 15" MacBook Pro is substantially higher, even after inflation, than it was five years ago. If the reason for that isn't growing margins, then obviously costs have also increased. Maybe Apple has a problem with cost control and/or spending decisions?
Or maybe the ratio of costs to selling prices have remained steady for cutting edge technologies. If it were milk or toasters we were talking about then I could understand your implication that input costs should not be increasing and perhaps even be going down. But Apple is doing the same thing today as it was doing 10, 15, 20 years ago; developing new products with increasing performance and capabilities. Seems that will always remain the same percentage of total costs.
I hear you, except that price increases are accelerating compared to the past. Why are costs so much higher lately than they used to be?
It may well be that this is just how much it costs to make fancy-pants computers now. I'm neither qualified nor adequately informed to offer an opinion about what Apple should or could do. All I'm saying is the current approach is moving the income level required to be an Apple user even higher. Our middle-class household can no longer afford the products we used to buy on a three-year cycle. Maybe I need to just accept that and walk away. I hope not, though.
Price increases in the Mac product line represent the move to higher performance in the components for SSD, TB3, screen density, etc while achieving the size and weight desired for that product line. The cost for software development increases because the OS is more complex than it was.
Thus margins indicate that costs have increased and not profits.
Also, the needs of most middle-class households can now be met by iPads or lower tier Macs rather than 6 core i7 15" MBP. The downside to the product line is that the direct replacement for a MBP from 3 years ago has a smaller screen but likely also costs less.
Apple still provides the iPhone 7 at $449 when talking about iPhones. The iPhone 8 is $599. The three year old iPhone 6s was $649 at launch. The 8 is a solid upgrade at $50 less than your $649 replacement budget. The Xr costs $749 but is 6.1"...so it's a worthwhile stretch if you want to go that route and the same price as the 6S Plus. So if your phone was a 6S Plus in 2015 the Xr is a direct replacement at the same price.
There's just this extra tier above the tier that you purchased in 2015 and there isn't a smaller option anymore.
That you don't like the upgrade path doesn't mean that Apple has priced it out of the range of a middle-class household. If you could afford a $649 phone every three years in 2015 you can afford a $599 iPhone 8 in $2018. The Xr should be $649 next year if the pattern holds and be an excellent replacement for a 3 year old iPhone 7.
Call it "gaslighting" but the complaints are simply entitled bullshit. There's no "acceleration" in price increase. The replacement for the 6S Plus is the Xr at the same price point. There wasn't a replacement for the 6S but a viable replacement is $50 less expensive than the 6S was in 2015. The Xs is a higher tier product than the 6S was.
6S->7->8->Xr
Your entire argument is horseshit.
You can't charge more for more performance otherwise every product in existence is an order of magnitude better than previous products. Automobiles are much faster, fuel efficient and safer than past vehicles. By your distorted, stunted argument every Toyota Corolla or Honda Accord should ship for 80,000 "cuz look how much better they are!". Computers increase in performance over time. Their prices increase relative to pv calculations and inflation fluctuations. They might also increase as Wurthele astutely indicated because they have some intrinsic cost (ie support or services). However products shouldn't cost more just "cuz betta". That's nonsense because by definitions computers ard phones are *better* than the previous model. Otherwise, what would be the *point*?
In that respect, Apple products have very much accelerated price increases. MBP prices have increased 20%. Mini prices have increased 50%. Phone prices have increased 40%. And that is not accidental. The answer has already been divined in this thread: Apple is compensating for dips since past super-performing sale record years. The price of components have declined. Screens may be more dense but prices for high density screens have declined. SSD prices have tanked. DDR4 RAM is no longer 100 bucks per 8 GB by default. Even Intel has dropped its CPU prices in response to simple market economies of scale, as well as competition of AMD.
Your entire argument that computers have more abilities and should therefore cost proportionally more is asinine to the extreme, because human salaries, neither here in the US, nor anywhere else, can keep up with such advances. Apple in fact, under your thesis, would make computers for themselves because no one would be able to afford them.
Comparing the XR to the 6S Plus is beyond disingenuous. The 6S Plus was the best you could get at the time, while the XR is the lowest possible model. The 6R would be analogous to something below the 6S which cost less than the XR.
Your entire argument is one long nonsensical circle jerk predicated on product cost based on capability. That entire argument is pointless because otherwise, I could argue that a $10000 Core 2 Duo system in 2018 would be a "value" because it outperforms my old Performa or Apple IIC.
Your comment about the 6S Plus having been the best you can get so can’t be compared to the Xr is ludicrous. That blows up your Toyota Corolla/Honda Accord argument and you don’t even know why. Honda, many years ago, had the Accord as the top of the line model. By your argument, no matter what Honda does, it’s top of the line model should not have increased in price by as much as it clearly has. Because today the top of the line model by Honda Corp is a very expensive Acura. Comparing two products by where they fit into a company’s product line is at worse disingenuous, at best ignoring reality. The reality is, these are two different phones, one costing at its introduction $50 less than the other at its introduction, and even less when adjusting for inflation. The Xr is clearly a more advanced phone at that lower introductory price. Do the simple mind experiment... imagine the Xr was from another vendor. It’d be easy to then claim that vendor X, with its Xr introduction, is a much better phone at a better price today than Apple’s flagship of a few years ago.
I just compared a Xs Max 512GB $1449 to a Note 9 512GB $1249, Apple’s premium is 16%. For that you get premium material (all glass, stainless steel), superior security, processor, screen among others. Noting that Samsung supply themselves with the display so it costs them less. Why doesn’t Samsung get some of this criticism?
I don‘t know about the US, but in Germany Samsung sells the Note 9 with 512GB for 1249€ while Apples iPhone Xs Max 512GB can be had for 1649€. The prices outside the US are outrageous as Germany is not even really bad off. In other countries the differences to the US prices are even bigger. So your example just goes to show Apple is rightfully being criticized - at least outside the USA.
Except you can't compare hardware to hardware -- because with the Samsung you get a free OS that's worth every penny. With the iPhone you get a great OS with ongoing virus protection and a plethora of Apple Ecosystem and services. They aren't equivalent -- even if they have similar hardware specs.
One can prefer iOS as I do. I do not own any Android product whatsoever - and still criticize Apple for a pricing policy that keeps the Apple community from growing.
But the Apple community is growing. Have you not heard Tim Cook speak about the growth in the installed base these past few conference calls? Because that’s what’s critical, moreso than unit sales in any one quarter. Go read Above Avalon’s Weekly Articles from a couple weeks ago. It’s about the gray market and how that’s supporting adoption of iPhones at lower price tiers. Then it’ll make more sense why Apple itself is moving farther upmarket.
Is this report talking about gross margins or profit margins? Do you have a comparison of average selling prices over time?
Meaningless to to this discussion. When Dodge started selling the 12-cylinder Viper it would have had a positive effect on ASPs. But it offered a lot more power and sportiness. Apples latest iPhones offer a lot more performance and capabilities versus previous generations. You’d expect ASPs to climb. Gross margins is where the comparison should lay, and this article does a good job pointing out how they have not significantly moved during Cook’s tenure.
The 2010 MBA had more performance and capabilities than the 2008 model but it was cheaper. Same with the $329 iPad compared to the original. Anyone who doesn’t see that Apple is offsetting slower/flat unit sales growth with price increases is blind. New flagship iPhones used to start at $649, now they’re $999. Now you can argue the XS is $350 better than 6 was, that’s obviously subjective but it’s still more expensive. Take the new Mac mini. Starts at $799. The previous entry point was $499. Again, one can argue that the new mini is way better and deserves the $300 price increase but the bottom line is you used to be able to get into the Mac ecosystem for $499 and now the cheapest entry point is $799. The previous entry point to iPhone was the $399 SE. Now the cheapest entry point is the $499 7. And the cheapest iPad used to be $259; now it’s $329. In the past you could get an Apple TV for $99; now it’s $179. It costs more to get into the Apple ecosystem that’s just a fact.
It’s not appropriate to cast the comparison the way you have. Like saying the entry level cancer cure in 1950 was les expensive than today’s entry level cancer cure. These are different things you are comparing. I use an extreme example to illustrate my point.
As for being blind, I could accuse those who aren’t willing to acknowledge that Apple could certainly juice units sales year after year by simply designing and developing iPhone models spanning lower price tiers, as other vendors have done. How popular would be a 6” OLED iPhone priced at $400? Pretty popular, but Apple would make no margins on such a model. So it’s not that Apple is reacting to slower/flat unit sales. It’s quite the opposite; Apple has deliberately decided to go farther up market in capabilities, performance, etc, and at significantly higher prices. Slower/flattening unit sales is a result of that strategy, not the reason for the strategy. You see, those who aren’t blind can see that it’s acually the opposite of your characterization.
I don’t agree, or at least don’t agree that it can only be one or the other. I highly doubt that Apple would intentionally try to slow unit growth. Going “up market” allows Apple to still post record financials even when sales have flatlined. But for how long? How long can they keep increasing prices to offset flat to declining sales?
Again, missing the point. Of course Apple hasn’t intentionally slowed sales. The company has intentionally continued to outpace competitors in technology, performance, etc, and is charging prices appropriate to those accomplishments. Knowing that that might flatten unit volumes is different than intending for it to do so.
Outside of their A-series chips where is Apple outpacing the competition? iOS vs Android is subjective but hardware wise most of the competition is right up there with Apple. And no one would claim Apple is top of the pack when it comes to ML/AI.
Is this report talking about gross margins or profit margins? Do you have a comparison of average selling prices over time?
Meaningless to to this discussion. When Dodge started selling the 12-cylinder Viper it would have had a positive effect on ASPs. But it offered a lot more power and sportiness. Apples latest iPhones offer a lot more performance and capabilities versus previous generations. You’d expect ASPs to climb. Gross margins is where the comparison should lay, and this article does a good job pointing out how they have not significantly moved during Cook’s tenure.
The 2010 MBA had more performance and capabilities than the 2008 model but it was cheaper. Same with the $329 iPad compared to the original. Anyone who doesn’t see that Apple is offsetting slower/flat unit sales growth with price increases is blind. New flagship iPhones used to start at $649, now they’re $999. Now you can argue the XS is $350 better than 6 was, that’s obviously subjective but it’s still more expensive. Take the new Mac mini. Starts at $799. The previous entry point was $499. Again, one can argue that the new mini is way better and deserves the $300 price increase but the bottom line is you used to be able to get into the Mac ecosystem for $499 and now the cheapest entry point is $799. The previous entry point to iPhone was the $399 SE. Now the cheapest entry point is the $499 7. And the cheapest iPad used to be $259; now it’s $329. In the past you could get an Apple TV for $99; now it’s $179. It costs more to get into the Apple ecosystem that’s just a fact.
Exactly, increasing prices to offset lower demand is never a good strategy. It works in the short term, but there's only so far you can go (and Apple's already there) before it affects sales in the medium to long term. I think Cook saw the revenue growth go negative in 2016, and to correct it just applied the easy fix of raise prices. The number one problem I and everyone I speak to has with regards to Apple products is the price. Apple gear is just not good value for money anymore. And articles like this don't help matters in Apple's favour; if articles excusing Apple's pricing need to exist, there's a big enough proportion of people who are concerned over the pricing, meaning there's a problem with it. People don't mind paying a bit more for quality and customer service, but people don't want to be ripped off.
Like I said, it’s subjective whether someone thinks a product is priced fairly. But it absolutely is a fact that Apple products are getting more expensive.
It is, there have always been a minority of people who have complained about Apple’s pricing, but they just weren’t Apple’s target market or couldn’t see how Apple’s devices were in fact good value. Apple doesn’t make machines for the budget end of the market so there’ll always be complaints from those people. The minority complaining about price has ballooned in recent years, and now seems to be the majority. Maybe Apple’s just trying to go after the high end; the Ferrari of the market - which would explain the pricing. Only thing is the performance doesn’t equate to the high pricing.
That maybe used to be true.
Ferrari doesn't shove Mazda engines into Ferrari chassis and call it a day.
The Mini is a prime example of that.
The SE, the iPhone 7, the AppleWatch 3 GPS, the iPad Mini and the Gen6 iPad refute that.
Is this report talking about gross margins or profit margins? Do you have a comparison of average selling prices over time?
Meaningless to to this discussion. When Dodge started selling the 12-cylinder Viper it would have had a positive effect on ASPs. But it offered a lot more power and sportiness. Apples latest iPhones offer a lot more performance and capabilities versus previous generations. You’d expect ASPs to climb. Gross margins is where the comparison should lay, and this article does a good job pointing out how they have not significantly moved during Cook’s tenure.
The 2010 MBA had more performance and capabilities than the 2008 model but it was cheaper. Same with the $329 iPad compared to the original. Anyone who doesn’t see that Apple is offsetting slower/flat unit sales growth with price increases is blind. New flagship iPhones used to start at $649, now they’re $999. Now you can argue the XS is $350 better than 6 was, that’s obviously subjective but it’s still more expensive. Take the new Mac mini. Starts at $799. The previous entry point was $499. Again, one can argue that the new mini is way better and deserves the $300 price increase but the bottom line is you used to be able to get into the Mac ecosystem for $499 and now the cheapest entry point is $799. The previous entry point to iPhone was the $399 SE. Now the cheapest entry point is the $499 7. And the cheapest iPad used to be $259; now it’s $329. In the past you could get an Apple TV for $99; now it’s $179. It costs more to get into the Apple ecosystem that’s just a fact.
It’s not appropriate to cast the comparison the way you have. Like saying the entry level cancer cure in 1950 was les expensive than today’s entry level cancer cure. These are different things you are comparing. I use an extreme example to illustrate my point.
As for being blind, I could accuse those who aren’t willing to acknowledge that Apple could certainly juice units sales year after year by simply designing and developing iPhone models spanning lower price tiers, as other vendors have done. How popular would be a 6” OLED iPhone priced at $400? Pretty popular, but Apple would make no margins on such a model. So it’s not that Apple is reacting to slower/flat unit sales. It’s quite the opposite; Apple has deliberately decided to go farther up market in capabilities, performance, etc, and at significantly higher prices. Slower/flattening unit sales is a result of that strategy, not the reason for the strategy. You see, those who aren’t blind can see that it’s acually the opposite of your characterization.
I don’t agree, or at least don’t agree that it can only be one or the other. I highly doubt that Apple would intentionally try to slow unit growth. Going “up market” allows Apple to still post record financials even when sales have flatlined. But for how long? How long can they keep increasing prices to offset flat to declining sales?
Again, missing the point. Of course Apple hasn’t intentionally slowed sales. The company has intentionally continued to outpace competitors in technology, performance, etc, and is charging prices appropriate to those accomplishments. Knowing that that might flatten unit volumes is different than intending for it to do so.
Outside of their A-series chips where is Apple outpacing the competition? iOS vs Android is subjective but hardware wise most of the competition is right up there with Apple. And no one would claim Apple is top of the pack when it comes to ML/AI.
Other than that did you enjoy the show Mrs Lincoln?
The A-series is enough of a lead. Then there was Touch ID, Face ID, security, speed of iOS upgrades, etc. iOS vs Android adoption rates isn’t subjective but a function of engineering design and execution. Whether the latest Android might have software parity with the latest iOS is immaterial when the vast majority of iOS devices gets them while the vast majority of Android devices don’t.
I just compared a Xs Max 512GB $1449 to a Note 9 512GB $1249, Apple’s premium is 16%. For that you get premium material (all glass, stainless steel), superior security, processor, screen among others. Noting that Samsung supply themselves with the display so it costs them less. Why doesn’t Samsung get some of this criticism?
Because Samsung is raising their prices piggybacking on Apple. It still cold comfort to people who don’t care that much for those premium materials at those prices. Some people are on tight budgets. It’s Apple’s prerogative to move upmarket, but not everyone wants BMWs and Mercedeses, even if they could afford them. Then, there’s the perception issue too. If people feel like they get ripped off, even if they’re not, you’ve got a problem. At the end of the day, this is grumbling while some people realize that going forward, if they want the latest Apple tech, they either have to borrow to buy it, or buy used or refurbished, and hold on longer to it. So Apple is just dropping the “affordable” from “affordable luxury”.
You can get a top end iPhone and pay it off over 24 months with zero interest. Or you can get last year’s model for half the price and do the same thing. Now figure how many cups of coffee you could make at home instead of buying at a coffee shop per month to afford one. I’ll wait.
The phone still costs the same even if you spread it over 2 years with no interest (I was starting from the assumption that all phones are sold on 24 month interest free "contract"). This makes it easier for some people, but still costs the same. And for last year’s model, not sure where you get it for 1/2 off, except maybe carrier specials with strings attached. But this just proves my point: Apple’s tech is becoming a thing of luxury for people who don’t look at money, and makes regular people need to jump through all kind of hoops How many people reading this can just go to an Apple store and buy a laptop at the price they ask for? I would guess less and less people do that, instead looking for deals. And I was not only talking about iPhone, but everything they sell. I bought my laptop, refurbished with a Barclay card with introductory interest and paid it off early. This is the new Apple reality. And thanks for waiting: I make my coffee at home,and only occasionally splurge on outside coffee. Should I stop buying coffee beans for stretches of time so I can afford a new iPhone X? Is this the marketing message you want Apple to use going forward: which foods will you give up, to own Apple stuff?
I just compared a Xs Max 512GB $1449 to a Note 9 512GB $1249, Apple’s premium is 16%. For that you get premium material (all glass, stainless steel), superior security, processor, screen among others. Noting that Samsung supply themselves with the display so it costs them less. Why doesn’t Samsung get some of this criticism?
Because Samsung is raising their prices piggybacking on Apple. It still cold comfort to people who don’t care that much for those premium materials at those prices. Some people are on tight budgets. It’s Apple’s prerogative to move upmarket, but not everyone wants BMWs and Mercedeses, even if they could afford them. Then, there’s the perception issue too. If people feel like they get ripped off, even if they’re not, you’ve got a problem. At the end of the day, this is grumbling while some people realize that going forward, if they want the latest Apple tech, they either have to borrow to buy it, or buy used or refurbished, and hold on longer to it. So Apple is just dropping the “affordable” from “affordable luxury”.
You can get a top end iPhone and pay it off over 24 months with zero interest. Or you can get last year’s model for half the price and do the same thing. Now figure how many cups of coffee you could make at home instead of buying at a coffee shop per month to afford one. I’ll wait.
The phone still costs the same even if you spread it over 2 years with no interest. This makes it easier for some people, but still costs the same. And for last year’s model, not sure where you get it for 1/2 off, except maybe carrier specials with strings attached. But this just proves my point: Apple’s tech is becoming a thing of luxury for people who don’t look at money, and makes regular people need to jump through all kind of hoops How many people reading this can just go to an Apple store and buy a laptop at the price they ask for? I would guess less and less people do that, instead looking for deals. And I was not only talking about iPhone, but everything they sell. I bought my laptop, refurbished with a Barclay card with introductory interest and paid it off early. This is the new Apple reality. And thanks for waiting: I make my coffee at home,and only occasionally splurge on outside coffee. Should I stop buying coffee beans for stretches of time so I can afford a new iPhone X? Is this the marketing message you want Apple to use going forward: which foods will you give up, to own Apple stuff?
It’s amazing to me that folks would have the lack of awareness to claim that Apple products in 2007, during the financial crisis where folks were losing their jobs and homes, was somehow more affordable for “regular people” then than today after 10 years of economic recovery, growth and low unemployment.
Pretty much every price point that existed in 2007 still exists today in Apple product lines. They may not be the top product but you can buy them new with warranty. That’s ignoring the viability of used devices given Apples ongoing support for them.
As a note, the 2006 mini was $799. When they updated the mid-2007 they went to $599. The current mini price is in line with historical mini prices from that period as this is a large spec bump much like the 2006 mini going core 2 duo in the entry model over the core solo.
If Apple wasn’t a “luxury” when everyone’s 401K cratered, was worried about losing their job and home during an economic crisis I have no idea why they are a “luxury” today. The answer is that Apple, like all premium brands, has always been a luxury that folks of all economic levels can buy into at different levels of the product line...just like branded sneakers, handbags, cars, jewelry, etc.
Comments
Not as dumb as charging by the clock cycle.
The NSX used the engine from the Legend
Lamborghini and Audi collaborated on the V10 engine used in the Gallardo and Huracan.
Pagani Huayra uses a Mercedes V12 engine.
Aston Martin Vantage uses a Mercedes V8
The Lous Evora uses a Toyota engine.
The i3 Mini you are whining about is faster than the 2017 15" MBP Core i7-7920HQ in single core and faster than the 2017 21: iMac Core i5-7500 in multicore.
That leads me to believe you know very little about supercars or computers.
That different perspective by Cook (priority: money) and Jobs (priority: product) did benefit just Apple, in lieu of most other stakeholders:
It is fair to say Cook derived more money from indeed many more customers, but severely fell behind with transferring added value to his original customers (who never asked for volume but for top quality and an up-to-date product portfolio, ref. Jobs era products conforming to Moore’s law).
In relative terms, Cook also left investors in the dark (=> compare stock price to wealth accumulation during his reign) but it is fair to say that Jobs wasn’t a great fan of dividends either.
Cook’s extreme expansion (/milking) strategy will cease to be sustainable when saturation arrives in the single product category Apple made itself dependent on. This is what makes fund managers very nervous - and not reporting sales numbers is only making that worse.
The lean and mean machine has become the massive, incumbent moloch, that it used to parody itself in 1984, where customers typically don’t benefit from. And with lots of additional (stock related) risk that can become unmanageable, even for Cook.
I like that you’re already angry about products that aren’t even announced yet. And you wonder why people are being referred to as “haters”.
Btw I would assume the next iMac will have Vega GPUs given the MBP gets those this month. But stay angry.
There it is, in a nutshell. You just said it all. Over the past five years the prices of Apple products have climbed. This is THE CAUSE, not the effect, of flattening unit volumes. Duh! When will people see this the right way around? Apple’s efforts to stay ahead of the competition on performance, capabilities/features, etc, and charging higher prices appropriate to that better performance, is what has led them into an even more premium space, and the effect of that has been, yes, you sell fewer units at those higher prices.
The opposite narrative, which many are trying to push here, is that Apple was seeing softening demand years ago and so decided to raise prices to soften it some more. Ridiculous for two reasons. First, it flies in the face of economics. Second, unit volumes were, for most of those last five years, climbing. And that second bit of detail blows away anyone’s argument that Apple raising prices is a reaction to softening demand. Ludicrous.
Example: Apple introduced the 6/6+, both larger than previous models, and raised the prices of both. More money for more phone. That year was called a super cycle because Apple had never offered such large screen iPhones prior, and so not only did Apple sell as many iPhones at higher prices as they had sold smaller iPhones at lower prices the year prior, they actually sold more. But raising prices while increasing unit volumes is not sustainable, unless there’s some very significant new capabilities/features that come along with the higher prices, like those 6/6+ larger screens the market had been waiting years for.
Apple continues to outpace the competition on capabilities/features/performance, at even higher prices, but not every year is a super cycle, or should be expected to be. Just maintaining flat unit volumes is already an achievement at these higher prices. What this suggests is that, at lower prices, Apple WOULD sell more units. But the narrative that seems to exist is that at any price Apple unit volumes are flattening off, ignoring that fact Apple has raised prices for years as the cause for unit volumes flattening.
The A-series is enough of a lead. Then there was Touch ID, Face ID, security, speed of iOS upgrades, etc. iOS vs Android adoption rates isn’t subjective but a function of engineering design and execution. Whether the latest Android might have software parity with the latest iOS is immaterial when the vast majority of iOS devices gets them while the vast majority of Android devices don’t.
Pretty much every price point that existed in 2007 still exists today in Apple product lines. They may not be the top product but you can buy them new with warranty. That’s ignoring the viability of used devices given Apples ongoing support for them.
As a note, the 2006 mini was $799. When they updated the mid-2007 they went to $599. The current mini price is in line with historical mini prices from that period as this is a large spec bump much like the 2006 mini going core 2 duo in the entry model over the core solo.
If Apple wasn’t a “luxury” when everyone’s 401K cratered, was worried about losing their job and home during an economic crisis I have no idea why they are a “luxury” today. The answer is that Apple, like all premium brands, has always been a luxury that folks of all economic levels can buy into at different levels of the product line...just like branded sneakers, handbags, cars, jewelry, etc.