Does Apple Need a Really Expensive iPhone?

The Apple iPhone is arguably one of the planet’s most popular smartphones, with millions of consumers across the globe using these devices on a daily basis. Since its debut in 2007, the phone has undergone a serious of different changes, as the screen resolution has improved, new apps have been developed, and the Mac iOS operating system has bounded forward. In spite of all of these changes, one element has remained relatively unchanged: the iPhone’s price. With competition from all sides, many experts have pondered the simple question, does Apple truly need an expensive iPhone to set it apart from all the others.

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Examining the Price Equation

There are several things to keep in mind when looking at the price of a smartphone. For starters, consumers rarely pay full price for their devices. Instead, phones are purchased from phone carriers at steep discounts, with the service provider subsidizing the total cost of the device. Phone companies make up for this discount by locking consumers into a multi-year contract. Those who do choose to pay full price for their phones and expect to pay several hundred dollars for the unlocked device.

In spite of the subsidies available to consumers, the iPhone remains a relatively expensive phone. In start contrast to the iPhone, many Android devices are available for next to nothing. Android manufacturers are willing to give away devices to new customers, in an attempt to snag consumers who are unwilling to pay for a new phone when signing a new contract.

Status vs. Marketshare

Apple walks a tricky path. For years, the company has enjoyed popularity with consumers who use its products due to their exclusive nature. Although the iPhone has become a rather common smartphone, many iPhone owners still feel they are part of an elite group of technology users who use a superior product.

So long as the iPhone stays relatively expensive in comparison to other phones, the status quo remains largely unchanged. Consumers with money to spend will shell out on the comparatively expensive iPhone, while others will instead go for cheaper Androids and other smartphones. Significantly reducing the features of the iPhone and offering it at a lower price could potentially reach out to an additional segment of the market, in turn increasing Apple’s profitability. The dilemma, however, is that such a move could alienate customers looking for an exclusive product.

As Apple faces stiffer competition in the ever-changing world of smartphones, there is no doubt the Cupertino-based company will need to evaluate its standing in the technology marketplace. Consumers are demanding more advanced phones from all manufacturers, and players like Samsung and HTC have stepped up to the plate with sleek devices that rival the iPhone in many ways. The recently released Windows 8 platform further places Apple’s dominance in peril. Should the company wish to hold on to its position as one of the forces to be reckoned with in the smartphone industry, making phones available for a lower price could be a vital move.

Tim Edmonds is a software developer and a technical writer with over a decade of successful professional experience. Currently Tim writes for Vimeo Mac download software.

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Tim Edmonds is a software developer and a technical writer with over a decade of successful professional experience. Currently Tim writes for Bosch service center located in Ukraine.

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