If there is an electronic that you desire, Apple likely makes it.
Apple has come a long way since providing just music players and phones.
With its own streaming platforms and digital wallet, the company has branched into several industries.
As most Apple users know, however, buying Apple products is rarely cheap.
Considering that there are plenty of other electronics companies out there, you may wonder what makes Apple so expensive.
Why Is Apple So Expensive? (10 Reasons)
Across all the Apple products available, the average price is around $1,000 with some of its advanced products costing far more.
Apple is expensive because of its operational costs, its focus on releasing a limited number of products at a time, its reputation as a high-quality brand, and the high resale value of its products.
Let’s look at these factors in more detail.
1. Research And Development Costs
One of the company’s biggest expenses is its research and development team.
Apple is constantly researching new ideas and services.
They’re an innovative company for a reason.
They want to be the first to introduce new technologies that can change the world.
In order to be innovative, the company has to adequately fund its research and development team.
Apple spends several billion dollars on its R&D department every year.
Not every company invests quite as much money.
Since Apple is spending a lot of money, it needs to offset that cost with high prices on its products.
The benefit of spending so much on its R&D team is that its products tend to be high-quality and polished.
They offer services before other competitors even consider developing those services.
However, it does come at a high cost for the company.
Apple is expensive because of its high research and development costs.
2.Limited Quantity Releases
One of the biggest reasons Apple is expensive is that they have limited product releases.
They only develop a few products at a time, then release them into the market.
As such, only a select number of people are able to get their hands on some of their products.
It takes time before Apple releases enough products for everyone.
This makes Apple expensive because it essentially creates an artificial shortage.
Everyone has to rush to the store to buy the product before it’s sold out.
However, Apple is the one responsible for the shortage.
It essentially inflates its price by releasing its products in limited batches.
It holds to the economic rule that when demand is high and supply is low, the price of the product increases.
Some of Apple’s products specifically run in limited releases.
Limited edition phones or watches, for example, tend to be more expensive than those with ongoing production.
That’s because their scarcity is even higher.
Apple is expensive since its tendency to release products in batches increases scarcity which drives up the price.
3. Connected Gadgets
Another reason Apple is expensive is that once you start buying its products, you tend to have to keep buying them.
That’s because Apple makes products that work exclusively with other Apple products.
If you buy an Apple Watch, for example, then you can only link it to other Apple products.
You can’t link it to an Android phone, for example.
Because you’re only able to use Apple’s products, software, and services together, it essentially traps you in its ecosystem.
If you want to get the most out of your Apple phone, then you need to buy other Apple products, for example.
Since you end up sort of stuck in the ecosystem, you find yourself having to buy more and more products.
This also means that Apple is able to charge high prices for its products.
Apple products only work with each other, so you have no choice but to buy more Apple products.
There isn’t any competition within its own ecosystem.
Without that competition, there’s no reason for Apple to lower its prices.
Those who have Apple products will continue to feel pressured to keep buying Apple products since all their devices connect to each other.
Apple is expensive because it has its own ecosystem where competition doesn’t exist.
4.Long Lifespan
One of the things that Apple products have a reputation for is lasting for a long time.
Since Apple makes its products using high-quality materials, its products tend to last a long time.
It uses materials that prolong products’ lifespans.
As such, Apple consumers can enjoy their products for a long time.
Some may even have their Apple products from years ago.
Because they last a long time, not everyone purchases new Apple products frequently.
As a result, Apple has to ensure it earns as much money as possible from those who do go on to purchase the next model.
To do so, they put a high price on the product.
The high price covers the cost of using high-quality materials to make their phones long-lasting, but it also ensures that Apple is able to earn a high revenue even if fewer people are ordering their products.
Long-lasting electronics are also something that’s in high demand.
Electronics don’t always have long lifespans.
Since Apple products do, the demand for them tends to be higher.
That also impacts the price.
Apple is expensive because its products last a long time.
5. Doesn’t Sell Data Information
A lot of companies choose to sell customer data to various organizations to earn money.
They’ll collect bits of information on their users, then sell it to companies that can use it for advertising and other purposes.
In most cases, advertising companies use the information to create targeted ads for those on the data lists.
Since they understand the type of things that the individuals on the list like, they’re able to create more personal ads to serve them.
It increases the chances that the individual will purchase something featured in an ad.
Apple doesn’t sell information.
It maintains a status of privacy.
Apple collects very little information from its users compared to Google.
Google collects around 39 points of data.
Apple only collects 12 data points.
That information isn’t something they sell to others.
This makes Apple expensive because it means it can’t rely on data selling as a source of income.
For other companies, selling data makes up a good portion of their income.
They’re able to bring in millions, if not billions, of dollars by selling data.
Since Apple can’t pull from that income stream, they have to rely on the sales of their products and services to fund them.
That means higher prices on their products to ensure they reach their financial goals.
Apple is expensive because it doesn’t sell customer data to companies for large sums of money.
6. Offers A Lot Of Free Updates And Features
One of the benefits of using Apple and its services is that it usually provides new updates and features for free.
Apple typically releases at least one major update each year.
The updates typically offer things like stability or performance improvements.
They also normally add features that make using the product more efficient or convenient.
Other companies make you buy those upgrades or features.
While stability upgrades are usually free, if they come out with a new feature, then sometimes they charge their users for it.
With Apple, all those upgrades are free.
You’re able to enjoy most of the benefits of Apple without having to pay more for them.
However, this generosity comes with a high initial cost.
Since Apple knows it’s going to release free updates and features, it needs to have enough revenue to cover the costs associated with offering those upgrades.
To achieve that revenue, they need to sell their products at higher prices.
Apple is expensive because it releases free upgrades and features which adds to its costs.
7. High Marketing Costs
Apple may have carved itself a niche in the electronics industry, but it’s still competing with a lot of other companies.
Even if it focuses on producing its own brand of electronics, there are other companies that are releasing similar products.
Those companies are also usually selling their products at prices lower than what Apple products costs.
Apple sometimes finds itself needing to convince its consumers to continue buying its products.
For some people, the quality of the products is enough reason to continue buying Apple products.
For those who have never bought an Apple product before, they might need a bit more convincing.
As such, Apple spends a good amount of money on marketing.
They have to continually push the idea that they produce high-quality electronics.
They have to sell the idea that their products do more for consumers than the other products out there on the market.
Since they’re competing with a lot of other electronics companies, their marketing costs are quite high.
They need to invest in celebrity endorsements and find new ways of attracting people to their products.
Because they have high marketing costs, they need to sell their products at high prices to cover those costs.
Apple is expensive because of its high marketing costs.
8. High Resale Value
Because Apple products last a long time, they also have high resale value.
You can often find iPhones and Apple Watches selling for close to what their original price was even years later.
They retain their value.
Some people buy Apple products knowing that they can sell them at a decent price later.
Apple knows this, too.
It knows that some people might prefer to buy secondhand products.
Since they won’t be making money from those who buy secondhand, they have to ensure that they make as much money on the sales that they do.
That results in higher prices.
Apple is expensive because its products have high resale values.
9. High Aluminum And Glass Costs
Apple uses some materials that are quite expensive to source.
Aluminum and glass are two of those materials.
Other companies tend to use cheap plastic to make their electronics.
Apple uses aluminum to make its phone shell.
It also uses high-quality glass which is expensive to produce.
While this drives up their manufacturing costs, it allows consumers to enjoy the benefits of using an electronic made of high-quality materials.
The products look more appealing and are more durable.
Unfortunately, since this drives up their costs, they have to sell their electronics at higher prices.
Apple is expensive because its manufacturing costs are high.
10.Brand Reputation
A final reason Apple is expensive is because of its reputation.
Apple has made a name for itself by producing high-quality goods.
Consumers know that when they buy a product from Apple, it’s going to be a premium product.
That allows Apple to charge higher prices for its products.
People are willing to pay more for Apple products because they know they’re receiving a premium product in return.
Apple is expensive because of its brand name and reputation.
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