As you know iPhone X is by far the most expensive smartphone anyone ever did, not just Apple. We’ve talking about consumer products, because there are a bunch of luxury phones made by design companies and they cost way, way more.
In the US is $999, but outside will be much more expensive. Still the Americans aren’t very happy and they think the prices are out of reach for the average American.
Tim Cook said: “Well it’s a value price, actually, for the technology that you’re getting, and, as it turns out you know most people are now paying for phones over long periods of time, and so very few people will pay the price tag of the phone initially. Also, most people actually trade in their current phone, and so that reduces the price further, and some carriers even throw in subsidies and discounts. So, when we look at it the phone – the iPhone in particular – has become so essential in our daily lives, people want it to do more, more, and more and so we built more and more technology in to be able to do that”.
Basically there are two main ideas here. First Cook suggests that the price reflects all costs. From research and development, to production, shipping, storing, marketing, services etc. Secondly, I think Cook suggests that the final price is a number that everybody else decides what to do with it, because they are offering discounts and subsidies to attract more customers.
But I highly doubt that everybody is selling with no margin for profit. Specially not Apple. Because, as I remember Apple is one of the most profitable company in the world. And I’m not talking only about smartphone makers, companies in general. Also, it’s believed that they have around 250 bilion dollars cash reserves outside the US. Nobody make that kind of cash if they sell at cost prices. So, I don’t think anyone is buying what Tim Cook is saying.