Why does apple products cost so much

So why are Apple products so expensive in these countries? In places like the European Union a VAT is a consumption tax added to the price of goods and services.

Another factor to consider are any associated costs with importation. Things like import duties, shipping, insurance costs, and tariffs all contribute to price inflation when selling products overseas. India is a great example of this.

Now Apple is taking steps to not only price their products more competitively in India but also to open their first retail store in the country. Now you may imagine import costs only being a factor in foreign markets, but they can also effect customers in the US. Now that deadline was pushed back to December 15th, but Tim Cook would like to see the tax eliminated altogether.

Both of which are dangerous for the company. Again, the iPhone 6, which still looks, and feels good. Another reason why Apple products are Pricey is the obvious one. Apple products are Premium products.

As Gruber pointed out,. Take the infamous iPhone 5C for instance. You are justified for not even knowing about this model. It was a lower-cost version of the iPhone 5S. With a plastic body rather than the aluminum finish on the 5S. Sales did not go well.

Epic fail in that regard. People expect nothing less from them. Samsung and most other companies had Plastic phones too. But they had great sales. Another attempt at entering the Mid-range market was with the iPhone XR. Not only was it more expensive, but the difference between the bill of materials and the retail cost was much greater. Obviously, Apple wants to make a profit, so the bill of materials has to cost less than the device.

What makes Apple special is its ability to pull larger profits than its competitors. Instead of a technology company, think of Apple as a luxury brand.

That handbag isn't a more functional bag, but customers still value it more. Sawhney: So, all our products become an extension of our personality. Sawhney: I think that customer loyalty is hard to earn, but when you do earn the customer loyalty, love is blind. Narrator: But this strategy might not work forever. Competition with less-expensive Android phones has gotten steeper, and that's put the iPhone's market share at risk.

Sawhney: Apple's performance in India is pathetic. Narrator: If Apple can't sell more iPhones, it might have to sell fewer iPhones for more money. Charging a premium allows Apple to keep increasing its revenue, even if its biggest category, the iPhone, is declining. Sawhney: See, whenever you create a new product, what you want to do is to extract all of the premium that you can from the higher-end customers, people who are willing to pay a premium.

Apple does offer cheaper models, like the iPhone 11 or the inch iPad, but those aren't always the models customers choose. Sawhney: This is called extremeness aversion, because you don't want to buy the cheapest, you don't want to buy the most expensive, so the middle one looks like a compromise. Not just hardware but apps and software are equally optimized.

Anyone who needs high productivity will get addicted to the Apple ecosystem. This is the reason why computer professionals prefer an Apple ecosystem. Hence, the data is synchronized with each other and you are truly experiencing the magic of great compatibility. Hence, the discrepancy. The people who genuinely need Apple for their business or usage are the ones who are really into the Apple ecosystem because of the seamless compatibility.

Otherwise, you know that iPhone owner friend who just has an iPhone without the ecosystem. Recommended Why Avoid Android Tablets? So, Apple knows well that even if they keep their products expensive, people are still going to buy them.

Whenever you buy a smartphone or an electronic gadget, the cost is not only about the components that are fixed in it. In addition, there are various hidden costs. Apple keeps marketing its newly launched products heavily. This includes all the money for print media, news media, digital media, social media, etc. Apple advertises almost everywhere. Also, social media influencers charge a lot for influence marketing. For this reason, the company requires laborers and needs to pay them as well.

Places like India have cheap labor costs but the US labor cost is significantly higher. Every product that is made out of India has to pay heavy-duty charges.

These taxes are different for every country. This is the reason why an iPhone is much cheaper in Dubai or other countries. In case you want to buy one, try to get it from Dubai. Every Internet company keeps on getting legal actions. It requires funds. Larger cases need larger expenses. These are major recent examples. In the end, this is the most obvious reason. Apple knows it very well that even if they keep their products expensive, people will still keep buying Apple products.

The two common reasons are Apple branding and ecosystem, as I mentioned earlier. Apple is in itself such a unique product maker that it will still be fetching its core user base. This makes it audacious to consume a maximum of the profits. Check out Android vs iOS.