Since their introduction, APPLE’s iPhones are the most popular smartphone devices on the planet without any doubt. There has been an enormous number of feedbacks on the positives and negatives of the iPhone, with each side advocating their stand in a feverish manner.
While the pros and cons of these smartphones can be discussed endlessly, the fact that the iPhone devices are the best-selling smartphone brand in the world is beyond question.
APPLE is known for creating premium smartphones that did not compromise in quality. But the main question is what makes an iPhone so high-priced? There are some reasons which are simple yet hidden from the general view.
Having positioned itself in the premium Smartphone category, APPLE cannot afford to use non-premium parts within an iPhone device.
Analyst firm IHS iSuppli has calculated the cost of several components in a detailed manner that is used in smartphones.
A simple example will be if a Moto G and an iPhone are to be compared side by side, then aside from the battery, the rest of the components of the Moto G cost less than the ones present in the latter. These include the display, NAND flash, the interface, the memory, and several types of sensors.
To be precise, various Moto G’s components generally cost about half of that of the iPhone. The in-box contents provided with Moto G also cost relatively less than those supplied with the iPhone.
iSuppli’s rough estimation shows that if the assembly and components cost of a Moto G is at around INR.8,000, whereas for an iPhone, the cost would be around INR.15,000.
This clearly explains that APPLE has a high but not very high manufacturing cost for an iPhone device.
When you purchase an iPhone device, you buy yourself an entry into the APPLE ecosystem, giving you access to more than a million applications and features like FaceTime, iMessage, and iCloud services bundled free of cost with the device.
Then again, there is the proprietary iOS platform and periodic upgrades and updates included with it. The development costs for all these elements of the ecosystem, especially for the iOS, are taken care of in the device’s retail price.
Such a thoughtful and uniform ecosystem helps mitigate compatibility conflicts in advance throughout the iPhone and iOS universe.
Even though the actual price marking for this ecosystem is difficult to arrive at, yet it’s safe to assume that the wages of APPLE’s software designers, developers, and other technical staff make their way into the cost of every iPhone device.
The APPLE Economics
The supply of iPhones is relatively lesser than the premium Android devices. Due to their incredible popularity, the demand for iPhones is tremendously high. As any economics rookie would understand, a low supply chain plus huge demand means premium pricing.
This supply-demand gap leads to an inflated price influenced by this economics.
The iPhone Buzz
APPLE always outspends its competition every year by spending a tremendous amount of money on advertising and creating a captivating buzzes around its premium products. APPLE’s buzz formula also has been remarkably effective in getting its pre-existing customers on board to shop for its newly launched products.
This “Buzz Formula” results in a massive sell out as soon as any new iPhone product hits the stores. The expense to create this hugely successful constant buzz to ‘maintain the popularity, gets added into the iPhone’s retail cost.
Unlike other Smartphone giants who purchase their readymade processors from Mediatek or Qualcomm, APPLE crafts their own processor.
Typically, this gives them the advantage of designing this from scratch without compromising due to cost.
These A series Bionic processors are specifically tailor-made for the iPhones.The lead time and cost that goes into its extensive crafting & designing are humongous.
APPLE claims that the A-Series Bionic is the golden standard and beats any other machine learning platform available on any smartphone so far.
If you live in a city, you can quickly locate an APPLE store near you for all your inquiries.
APPLE has undoubtedly the best customer support compared to any other smartphone brands.
All these physical APPLE retail stores cost them money to maintain and wages of their employees. A substantial part of the iPhone price goes to the customer support budget.
Over the years, APPLE has successfully built a reputation for gold-standard quality and the breath-taking design of its products.
Apple’s reputation has created millions of loyal customers. This brand loyalty translated into a premium pricing or APPLE TAX that they’re able to extract from their vast pool of customers who are unwilling to settle for anything less or switch out of the Apple ecosystem.
An excellent way of purchasing your iPhone !
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