Apple and its pricing strategy

There is much speculation and criticism has been there after the release of apple iphone 5c and 5s. Also there is a criticism from the people stating that there is no difference from the previous phone other than the finger print technology.

Now the apple Inc bought mobile security firm Authen Tec for 356 million dollars. Further it has invested in R&D for fingerprint technology in iphone integrating Authen Tec tools with hardware and software.

In order to extract the price it has invested to buy firms and R&D it has to price its products considerably high. Also from the profit available they have invest in future products, R&D and technology.

With the competition from external source like Samsung and other mobile companies which said to be copying various technologies and designs from apple, the company has to stay exceptional. If they cut price and come down to competent with other mobile brands, then it will not be exceptional.

Further if they cut price and come in a level of field with other mobile brands there will not be any insanely great innovations and creativity in apple produts. We Apple fans should be proud that we are the part of innovation and should be proud of using one of the greatest companies, the planet had seen.

I feel there should be more stringent requirement and improvement in copyrights and pattern rights. Also the economic system should be designed in  such a way that it should support innovation driven firms.

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2 thoughts on “Apple and its pricing strategy

  1. Dear Deepak,
    Finger print is no great technology for apple for the kind of earlier innovations they have come up with. There is finger print recognition in front of many offices with a small device to let them inside the office.
    I feel apple is loosing out in terms of exciting the consumer by offering something different from their 1st phone. Their premium has to justify an upgrade every time.
    Being in the mobile phone industry i have been observing many ups & downs with mobile manufacturers like blackberry, nokia, samsung & apple in india. It just takes 8-10 months for a company to go up & go down on their peak volumes.
    Samsung also is having a tough time offlate. they have not sold volumes of their S4 like they have sold S3. It is the same problem apple is also facing that there is no big difference from their previous models.
    Apple has huge cash reserves. Market will not pay a premium all the time for their takeovers.
    Nokia did some of the best take overs some time early back like maps, music etc.But nothing happened. They were finally take over by Microsoft.
    The next big change in my opinion would be Windows mobile, which is available at low value to performance/features ratio & the low cost excellent performing chinese phones on Android.
    These apples & the samsungs have to work very hard to excite a consumer to pay a premium all the time

    praveen

    1. Dear Mr.Praveen,

      Sorry for late reply since I have crazy busy schedule in university. Apple keeps 70 % margin profit. Cost of production is 200 USD and selling rate is 650 USD. THe clear intention of apple is to earn as much as possible in this mobile boom. Previously there was ipod boom now no more. The strategy is to earn as much as can and invest in R&D of some other product. NOw they are into Television set R&D also. After they found out their next genius product , they will survive with it till burst.

      Regards,
      Deepak

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