We all know every apple products are expensive. But, let’s discuss the fundamental reasons why all the products are expensive.
Many people believe that Apple Inc. is just playing the game of monopoly. This thing is not 100% true.
In this article, we will discuss with thinking of Steve Jobs after rejoining Apple Inc.
Let’s understand why Apple products are expensive.
7 Fundamental Reasons Why Apple Products are Always Expensive
When Steve Jobs returned to Apple Inc. , the company was in very bad condition. From almost 5-7 years, most of the Apple products were failing.
At that time, Dell and IBM were the competitors of Apple. And Apple started losing market share in the personal computer.
Also read: 7 Unbelievable Things about Steve Jobs
Then Steve Jobs started publishing new products as the product is the symbol of social status. That’s how Apple is different from other companies.
Apple started providing premium quality of the computers(iMac) with the high price.
2. Research and Development Cost
According to the Apple Insider, the company has decided to spend $10 billion on the research and development in 2018.
Also, Apple had spent $11.58 billion in 2017 on R & D.
That’s why the product price increase to reach out the total cost of R & D.
On the other side, other companies spent very less money on R & D.
3. Product Line
I have researched from many sources about this topic.
Apple’s almost 60% revenue come from iPhone. That means the company is heavily dependant on iPhone.
It does not mean Apple has fewer sources to generate revenue. Apple is a trillion dollar company now. It has so many sources to generate revenue.
But still, 60% is a huge number. That’s why the price of this product is expensive.
4. Profit Margin
Apple’s profit margin on iPhones is nearly 60%. It is a huge number for any smartphone manufacturing company.
If we buy on iPhone X in $1000, the companies profit will be nearly $600.
5. Closed System
Each and every Apple products has its own closed system. Which means the operating systems of Apple (iOS and Mac OS) cannot be run on any other non-apple device.
It is in Apple’s DNA.
While having the closed system, it takes so much cost in research and development.
Apple has the world-class security software for their devices.
Windows, Android and Linux operating systems are still not able to beat the security level of Apple Inc.. Apple is unbeatable in terms of security.
It gives higher security than any other systems. That’s why they take more charge.
Also read: Oppo and Oneplus Vs. Xiaomi – SmartPhone War
7. Premium Look
The company believes that if the people are paying high for the products then the products should look premium.
If we take any old apple product, let’s say iPhone 4s, it still looks premium than other phones.
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