Why iphone is so expensive

Why Apple iPhones Are So Expensive Rev. 2.0

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Whenever Apple releases a new iPhone, it has become tradition for rabid Apple and Android fans to trade barbs in a childish display of fandom rivalry. Facebook and blogs will be replete with taunts and jeers on both sides. It was not good enough that they didn’t like the rival platform, they had to make sure the other side knew how much they hated their platform. Check out some of their work when Apple launched their new iPhone 6 and iPhone 6 Plus smartphones :

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Now that Apple has officially announced the iPhone 7, there is a new comparison out :

Of course, the comparison is hardly accurate, since the Nexus 6 is not water-resistant, just splash-resistant. The iPhone 7, on the other hand, has IP67-rated water resistance. It is also a fact that Apple iPhones have always lagged Android smartphones in features and specifications. In fact, Apple iPhones will always cost more… often far more, than an equivalent Android smartphone.

Updated @ 2016-09-13 : Updated the article for Apple iPhone 7, including new information on Apple iPhones and Android smartphones.

Updated @ 2016-01-26 : Ported it over to the new Tech ARP

Originally posted @ 2014-11-24

Apple iPhones Will Always Cost More

Frankly, the differences between an Apple iPhone and an Android smartphone have diminished in recent years, with both platforms borrowing features and ideas from each other. Arguing about who came up with which feature first will become nothing more than a pissing contest.

Whatever features that are unique to a particular platform will eventually be introduced in the competing platform. That’s what we want because it gives us the freedom to choose between the two platform without worrying about losing some key features we cannot do without.

Even so, one thing will remain certain – Apple will always price their iPhone models at a premium. That brings us to arguably the most vitriolic opinion that Android fans have about the Apple users – that they are all rich idiots who are getting fleeced by Apple into paying a ridiculously high price for the iPhones especially since they are using “dated” hardware or “older technology”.

Well, we are not going to go into why Apple iPhones are not using “dated” hardware or “older technology” in this editorial, but we are going to address this perception that Apple users are stupid to pay so much money for a smartphone. Then we are going to show you why Apple iPhones are so expensive.

Why Pay So Much For An iPhone?

Let’s take a look at the top 3 reasons why Apple users are willing to pay top dollar for their Apple iPhones.

1. It’s More Than Just A Smartphone

First of all, the Apple iPhone is more than just a smartphone. When you purchase an Apple iPhone, you are purchasing the iPhone ecosystem as well – everything from access to the 2.0 million apps (as of June 2016) in the Apple App Store to the free iMessage, FaceTime and iCloud services. Android users may argue that they have similar features but what they have is sometimes a pale shadow of what the Apple iOS platform currently offers.

For example, the Apple iPhone can automatically and continuously back itself up to iCloud since October 2011 with iOS 5. If something bad happens, the user can restore the entire contents of the iPhone using nothing more than an Internet connection. You don’t even need to use iTunes on a computer to perform this backup and/or restore process.

When we first wrote this editorial 3 years later in 2014, no Android smartphone could do that. Of course, we had no doubt even then that they would eventually implement something similar. True enough, Android 6.0 Marshmallow introduced such an ability in October 2015 (4 years after iOS), although it only works with Android apps that “target API version 23“.

2. It’s About Software Assurance

You are also buying “software assurance” in the form of iOS upgrades and updates. The recently released iOS 10, for example, was made available for the following devices, immediately and simultaneously :

• iPhone 5 (4 years old) or newer
• iPad (4th Generation) (4 years old) or newer
• iPad mini 2 (3 years old) or newer
• iPod touch 6th Generation (1.5 years old)

Google also releases Android upgrades on a periodical basis. However, those upgrades are not made available for many Android smartphones (even if they are of the same generation), and often, they are made available long after Google releases them.

This is due to the fact that the Android platform is “highly fragmented” – there is a wide variation in hardware features and packaged software, as well as manufacturer preferences. This has resulted in significantly slower or shorter “software assurance”, especially for older or less popular models.

Google released Android 6.0 Marshmallow on October 5, 2015. It took Samsung 4 months to start releasing it for the Galaxy S6 and S6 edge smartphones. ASUS also took 4 months to start rolling out their Marshmallow update for the ZenFone 2 Laser and ZenFone Zoom smartphones. That’s actually fast, because in the past, they would take about twice as long to release a major operating system update.

Of course, many brands choose not to offer the upgrade at all. Some, like HTC, promise an Android 6.0 Marshmallow upgrade for several smartphones, but remain stuck in development hell. The Marshmallow upgrade for the HTC One M7 was even scrapped, after being announced. In the meantime, Android 7.0 Nougat was just released…

3. It’s The Apple Experience

When someone considers the cost of a platform, it should be done holistically because when you buy an Apple iPhone, you are really buying an experience.

Apple iPhone users (generally) want a smartphone that “just works“. They do not care so much about specifications, as much as they do the experience of using the iPhone. They do not care so much about the number of features, as they do the experience of those features that are available. For that, they are willing to pay top dollar.

The less fragmented nature of the iOS platform also makes it very easy for them to transition from one model to another. The user interface and apps work exactly the same, whether you’re using the new iPhone 7, or the much older iPhone 5.

The Android platform allows for a customisable experience, but Apple fans don’t really want that. Or at least they are willing to sacrifice that for the familiarity of a consistent user interface.

Now, let us show you exactly what they are paying so much for. The real reasons why Apple iPhones are so expensive…

Next Page > Why Apple iPhones Are So Expensive, Does This Mean That Apple iPhones Are Better?

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Why is the Apple iPhone so expensive?

Level 12 · Community Manager at Seedly

Here are a few reasons why the Apple iPhone is more expensive than other smartphone brands available in the market.

1. Apple designs and engineers its hardware and software independently

Apple prides itself in putting their focus on creating the best user experience in the market. Building its own hardware and software independently mean more resources are needed and as a result, increases the prices of the iPhone. Unlike Apple, most smartphone brands do not build both their hardware and software from scratch. For example, Apple’s biggest competitor Samsung creates their own handsets but uses Google’s Android operating system.

2. Apple’s metal parts and components are sourced from all over the world

The iPhone is made up of many raw materials and metals that are extracted from all over the world. For example, gold is extracted from Peru and copper is from Chile. Sourcing for materials all over the world would incur additional costs and that could be transferred to consumers in the form of a marked-up price.

3. Branding the iPhone as a “luxury” product

For the longest time, Apple has marketed its iPhone as a “luxury” product compared to the other smartphones available in the market. This branding strategy allows Apple to charge a premium — better known as “Apple tax” where consumers pay more for its products simply because they are created by Apple. Yet, the increase in price hasn’t significantly deterred consumers from buying its products as many consumers continue to be loyal supporters of Apple for its widely known reputation.

Fun fact: Did you know that the price of an iPhone sold in Singapore is higher than the price of an iPhone sold in China or Japan?

It is not uncommon to see huge companies like Apple having different pricing strategies for different markets. In 2016, e-commerce company Linio released a report called “Technology Price Index” compiling a comparison table of how various tech products are being priced differently in different countries.

Source: Forbes (Stats based off 2016)

As reflected in the table, the average price of an iPhone in Singapore costs more than that of Japan’s and China’s. One of the reasons an iPhone in Singapore is more expensive than for example, China, is because our rent is higher than China in general. On top of that, the price bump is also a result of taxes and tariffs paid.

But what’s more surprising is that the price of an iPhone in India is higher than that of China. This is attributed to the need for middlemen or third-party retailers when trying to buy an iPhone in India due to the absence of a physical Apple store. Hence in order to maintain similar profits, Apple needs to mark up its iPhone price accordingly. Moreover, the Indian government has been increasing import duties on mobile phones over the years as it tries to get more companies to produce their products in India itself, as part of Prime Minister Modi’s “Made in India” initiative.
So will you consider getting iPhone 12 projected to launch in October 2020?

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