Apple Price Strategy

By making their products differentiated from the competition, Apple can establish their own price. Apple believes that people will pay some more money if they know that what they are buying is better and more reliable. That is also the reason why Apple sells the same products all over the world, making no selection or differentiation depending on where the market takes place. The high costs of Apple’s products are the one of the reasons why Apple Inc. preferred to be

Apple Inc strategy was to market each product in phases, making each product the status quo at its release. The release of the iPhone 4, customers would wait in lines the day before to be one of the first to have the iPhone 4. Theses same customers would also be on their previous released iPhone3/3g. Apples innovative strategy markets a product to its success, then adds a few features and releases it again as new.

The first steps in the mobile phone market let us understand once more what the key points in Apple strategy are. Innovation and Exclusivity go together, a higher-than-the-average price place the new device as a cult and trend object, something everybody want to have, a real status symbol. In few words Apple probably believes that a key concept in Innovation is the creation of a need. Along with the innovation in design, Apple is a pioneer and a leader as well in Environmental issues, another innovative approach that is granting more and more importance among customers of any product and people in general, due to very sensitive issue like Global Warming and home safety.

Apple also has an advantage on their low production cost because of its economies of scale and these are the main reasons that contribute to Apple Company’ dominance in the market with respect to new market entrants.

Apple being the top price point for its products must compete differently than some of the others in the market to pull in consumers willing to pay for the Apple brand and its promises, such as making devices as easy to deploy as they are to use.

Firstly, we should divide Apple Inc. into the Mac line and the iPhone/ iPad line. In the Mac line, the barrier to entry is very high, causing very few new firms to be able to enter. Developing a computer OS is a very difficult business, because software also need to be compatible with your system, which is very difficult because software companies may have to completely rewrite a program to suit your system. So the entry barrier is extremely high. On the other hand, the mobile device market may have lower entry barrier, as we can see firms like Samsung and Nokia also has their relevant share of the market, but exit

Apple is known for coming out with the newest and best technology. Apple has shown a trend of every year releasing a whole new iPhone generation. This year, Apple is stepping up its game. Apple released the iPhone 8 and the newest iPhone, the iPhone X, within months of each other, rather than its typical year gap. (These products success is shown in the line graph on the previous

The price of any technical device is the first thing that pops up into the buyers' head. iPhone is the most well-known phones when it comes to smartphones, therefore the price might be a bit high but it is reasonable. For example, when buying your new phone the price is indicated by how much memory capacity do you need. You'll be making a smart choice because you're only going to spend money on what you'll be using in the long run According to Apple.com, the price varies from $649 and $234. Also, the iPhone comes with a protective screen if you add $49, so if you break it, which is most likely not gonna cause any damage, the price to fix it is cheaper than other brands. In addition, it is easier to sell iPhone because it is worth the price and you won't

    This article discuss how supply and demand function in sales and business. In Apple’s case they feel their numbers for demand are not a fair representation for the true demand of iPhones. Apple has decided to not show sales because, they think these numbers will only reflect their available supply. If supply for pre-order is limited then the demand will appear low because, it will only reflect the limited quantity of iPhones available for pre-order. Other factors are cited for possibly decreasing demand such as; people taking time to buy the new iPhone because they are trying to decide if the costly upgrade is worth it. Apple’s blackout of prices is due to their conclusion that consumer demand for their product will not be reflected by the early sales so, sharing them with the public is counterproductive.

Apple is one corporation that everyone is frighten of, they are a huge threat in the mobile market. Apple is one of the fastest growing corporations with a 3-year average for Revenue Growth is at 52%, while their Profit Growth is at 70% (Hein, B.). With all of their acknowledgement from the world, they are quite different then Nokia. One of the differences between these two corporations is their product range. Nokia has a huge range of products; this is because they date back to 1865, so they continually adding more and more to their collection (Nokia). Since Nokia has a large range of products it give consumers more of a choice in their discussion making process. Whereas Apple only has been around since 1977, so they only have

Jobs also changed the pricing strategy and focused on value-based pricing that provided customers with premium products at a premium price. Product pricing has specifically set Apple apart from its competitors. Apple believed that they could create demand for their products which would give the company “power over prices through product differentiation, innovative advertising, ensured brand loyalty, and hype around the launch of new products” (Nair, 2014).

Apple’s root problem is the ability for competitors to drive product prices down through the creation of comparable devices or software. Apple is known for aspiring to bring innovative products to market at a premium quality and accompanying high price. Gaining high profit margins on the sales of their products has counteracted the lesser global market share percentage Apple has compared to other leading PC vendors. Exhibit 3b in the case study shows HP and Dell with more than double the market share in the year 2002-2014 in the United States alone. Apple did not make the top list of market share percentage on the worldwide market comparisons. In the more recent years of 2012-2014 Android became a top competitor with Apple by competing with comparable devices and operating systems. Apple cannot afford to let competitors have the opportunity to control their pricing strategies and affectively decrease customer perceived value.

As the iPhones have moved through their product life cycle (from the introduction to the growth or maturity stage) Apple adopted a penetration pricing strategy which means selling products at very low price to attract more customers. The rationale behind this decision was

Diversity in products and their prices helps Apple remain an inelastic company, regarding their demand. If a price rises for one of their products, there is sure to be another product that moves into that previous product’s price range that is still comparable in design and quality. There will always be people to buy the more expensive items not only because of Apple’s positive brand recognition and loyalty, but because Apple consistently produces quality and innovative products; including, if Apple finds a defect or fault, they fix the problem for free or replace the product altogether.

After a half circle of product life cycle Apple refreshes its offer with new features and decreases the price of the previous offer. Thus the market skimming has become the strategy and thus practicing market leadership in product-quality will cover the high cost and R&D. Thus the each year apple enthusiasts are getting the higher value of high quality and advanced features in the closely same price which actually comprises everyday less-price as well.