“People who buy iPhones generally aren’t swayed by lower prices, and that’s a huge advantage for Apple,” Emily Bary reports for Barron’s.
“That’s according to Warren Buffett, CEO of Berkshire Hathaway, who took to CNBC on Monday morning to discuss his continued faith in Apple,” Bary reports. “Buffett has, in the past year or so, amassed a sizable stake in the company.”
“The device ‘has some price sensitivity’ but ‘it’s very, very little,’ he said in the segment, following Berkshire’s annual meeting,” Bary reports. “This comes as Apple prepares to launch its upcoming iPhone later this year. There’s been speculation that the flagship model could cost more than $1,000, which is certainly expensive. But, increasingly, consumers have been opting for pricier models, driving up the average selling price of an iPhone.”
Read more in the full article here.
MacDailyNews Take: Apple will sell as many “iPhone 8” units as they can make, box, and ship regardless of the price tag they place upon them.
Apple targets high-value consumers. Apple separates the wheat from the chaff with their value proposition. Android phone assemblers generally do not target high-value consumers (they target price-conscious customers with endless BOGOF promos) and when they do go after the high-end, they simply do not compete well against iPhone.
Apple customers are the wheat. [Those who settle for Android] for whatever reason, failed to make the cut; they are the chaff. — MacDailyNews, November 13, 2013
SEE ALSO:
Global elites’ love of iPhone made Apple’s iOS a prime CIA target – March 7, 2017
Apple iPhone users spend more than ever on apps – February 21, 2017
Apple users have higher credit scores than Android and Windows users – January 24, 2017
Poor man’s iPhone: Android on the decline – February 26, 2015
Study: iPhone users are smarter and richer than those who settle for Android phones – January 22, 2015
Why Android users can’t have the nicest things – January 5, 2015
iPhone users earn significantly more than those who settle for Android phones – October 8, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
iPhone users smarter, richer than Android phone users – August 16, 2011
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Apple can certainly charge a premium price for a premium product. But I liked the trends in the 2010 timeframe when prices either held steady while products/performance improved, or prices at the lower end of a product lineup gradually slid down to better compete with Windows PCs (MacBooks, for instance).
The trend lately has been higher prices for new products, especially for the most recent release of the MacBook Pros. I believe that was a big mistake, and I do not want to see it replicated with the iPhone and other Apple products. I want to see a return to Apple products as a value proposition – a bit pricier initially, but not excessively so, and clearly a better bargain over the long term.
I understand the desire for lower prices, but lower prices would actually hurt the demand for Apple products.
From Wikipedia’s description of the Veblen Effect: “In economics, Veblen goods are types of material commodities for which the demand is proportional to its high price, which is an apparent contradiction of the law of demand; Veblen goods also are commodities that function as positional goods. Veblen goods are types of luxury goods, such as expensive wines, jewelry, fashion-designer handbags, and luxury cars, which are in demand because of the high prices asked for them. The high price makes the goods desirable as status symbols, by way of conspicuous consumption and conspicuous leisure; conversely, a decrease of the prices of Veblen goods would decrease demand for the products.”
https://en.wikipedia.org/wiki/Veblen_good
Apple commands higher prices because its products are demonstrably better than competing products. The Veblen Effect reinforces and supports Apple pricing.
No, Warren, Apple can charge YOU whatever it wants.
It’s amazing how much influence Warren Buffett has over Wall Street and the news media. Wherever he leads the sheep will follow. It’s great to have Buffett on Apple’s side and I hope he really is in for the long term. He’s become Apple’s #1 cheerleader and he’s got the money to back up his mouth.
I’ll bet we don’t see anyone trying to openly contradict Buffett on his support of Apple stock. I’m really glad Apple has at least one well-known big investor on Apple’s side. You know, Apple seems a little less doomed with Buffett backing Apple. I would never have imagined Buffett talking up Apple like there’s no tomorrow. I don’t know how long this love will last, but I’m savoring every moment.
I’m a little worried. I lived through Cube debacle.
Apple’s biggest enemy is Apple. There aren’t any threats on the immediate horizon, but over time people will get bored and apathetic once their 2-3 year-old iPhones do everything they want them to do making new purchases a frivolous expense. I’m less interested in new iPhone hardware than in an iOS overhaul. Basic tasks like switiching cellular on and off for a particular app take 5 taps and a scroll to get to. At least make the control center customizable for these types of things. Half of the current control center functions are useless to me right now.
That time is coming to an end. The Macs we be first. Yes people want a cell phone that works. Kids want a cell phone they can play with. As more people become comfortable with the tech, they will look for better pricing. It appears no matter which devices you buy, you can be hacked. So, price will become important.
At the end of the day, credit card purchases could be tied to a retina scan on the credit card companies servers. Apple Pay may go the way of the dinosaur.