Apple's price hikes went way too far in 2018
Justin Sullivan / Staff
- Apple raised prices across nearly all of its product lines in 2018.
- Starting prices for some of Apple's most popular products increased by about 20% on average.
- Apple says the prices are justified since the products themselves are better than ever, but that's a tough pill to swallow for customers.
This column does not necessarily reflect the opinion of Business Insider.
Apple raised prices across the board in 2018. You may have noticed.
In 2016, the starting price of Apple's newest iPhone, the iPhone 7, was $649.Advertisement
In 2017, the starting price of the most affordable new iPhone, the iPhone 8, was $699 — a 7% price increase from the year prior.
In 2018, the starting price of the most affordable new iPhone, the iPhone XR, was $749 — a 7% increase from 2017, and a 15% increase from 2016.Advertisement
In 2017, the 10.5-inch iPad Pro started at $649.
In 2018, the new 11-inch iPad Pro starts at $799 — a 23% increase from a year ago.Advertisement
In 2017, the 12.9-inch iPad Pro started at $799.
In 2018, the 12.9-inch iPad Pro starts at $999 — a 25% increase.Advertisement
In 2017, the Mac Mini had a starting price of $499.
In 2018, the Mac Mini's starting price moved to $799 — a 60% jump from the year prior.Advertisement
In 2017, the MacBook Air had a starting price of $999.
In 2018, the MacBook Air's starting price moved up to $1,199 — a 20% increase.Advertisement
In 2017, the latest Apple Watch — Series 3, with GPS but no cellular — had a starting price of $329.
In 2018, the Apple Watch Series 4, with GPS but no cellular, starts at $399 — a 21% increase.Advertisement
In 2017, an Apple Watch Series 3 with both GPS and cellular had a starting price of $399.
In 2018, the Apple Watch Series 4 with both GPS and cellular starts at $499 — a 25% increase.Advertisement
The price hikes targeted Apple's most affordable offerings. More niche or expensive products like the Apple TV and iMac Pro — which start at $150 and $5,000, respectively — kept their same prices from a year ago.
The price hikes make sense from Apple's perspective.Advertisement
The cost of innovating is high, and making futuristic devices with expensive components, like the iPhone X with its OLED screen, is more costly than it was before.
As Apple also alluded to this year when it decided to no longer announce unit sales in its earnings reports, growth across its most popular product lines, like the iPhone, is beginning to slow down. Price hikes help compensate for less business.Advertisement
But it really doesn't matter what the reason is for Apple's price hikes. The bottom line is that Apple can afford to raise prices, because customers will still buy those Apple products anyway.
Many people are happy to pay extra for Apple products because they believe they're getting extra quality. Apple is a unique tech company in that it controls the hardware, software, and services across all of its devices, as well as the in-store experience. Lots of people like that.Advertisement
Apple fandom is also a thing. Some people buy all of the latest Apple products because they love the company, and want to own every single new product from them. Price doesn't matter much to those customers.
The Apple brand is also huge around the world. Like Nike and its "swoosh" logo, prices seem to automatically go up if a product has that signature Apple logo on it. Apple is technology, but it's also fashion.Advertisement
Raising prices is psychological, too. When prices go up, fewer people buy those products, which makes them more rare. This also creates a "wow" effect whenever you see those rare products out in the wild. Maybe it makes you jealous, because you wish you had more money to buy that Apple product.
Apple's pricing strategy probably won't change anytime soon. After all, making innovative products isn't getting any cheaper, and Apple's brand is still desirable among people of all ages.Advertisement
Still, that doesn't mean Apple's price hikes in 2018 were justified from a consumer standpoint.
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