Apple Could be Close to its End

Jordan

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Since cornering the music player market with the groundbreaking iPod in 2001, Apple has been on a non-stop rollercoaster ride to the top.

Last year the tech giant hit the unprecedented market cap of a trillion dollars, and last month made it to 1.3 trillion. These astronomical figures are a testament to the success of Apple’s business plan and its genre-breaking market strategies.

Anything but Normal

On the surface, Apple seems to be a regular tech company. A standard company in this space makes its money by innovating faster than the competition, marketing and pricing their products better than the competition, and improving the lives of their customers with tech that solves problems they were previously experiencing.

Apple doesn’t follow pack when it comes to strategising growth. Instead, Apple has a history of pricing drastically higher than the competition, innovating slower than competing brands, and even adding problems to consumers lives rather than solving them. Taking ports away from products including AUX and USB ports caused major problems that could only be remedied with expensive dongles, also sold by Apple.

Is Apple a Luxury?

Beside tech, another industry Apple could be compared to is the luxury goods industry. Luxury goods such as Gucci and Prada charge an enormous premium for their products, and they can do so because of their large and affluent base of loyal consumers.

When Gucci releases a bag, they aren’t pricing the bag so that it reflects labour and material costs. Instead, they price the bag in line with competing fashion brands, consumer expectations, exclusivity of the line, and to uphold the reputation and prestige of their brand.

Comparing Apple to this model would bring up the well-used term, the ‘Apple tax’.

The Apple Tax

The Apple Tax was the term coined to describe the enormous premium you pay for an Apple product over something similar in quality from the competition.

It’s well known that a PC running Windows at similar specs is going to be a lot cheaper than an Apple Mac. What’s worse, a PC is always going to be customisable and expandable.
Apple has gone as far as to weld components inside of a MacBook together to stop consumers from replacing parts and making modifications. Although it should be said that Apple states the reason for building MacBooks this way is to make the space inside the shell more efficient and to fit more components inside.

Apple does act like a luxury brand in many ways. They price products far higher than competing brands would, and the reason seems to be because they can. Apple fans are loyal to the end, and will always take an Apple product over a competing brand.

The Apple Fan

The Apple fan knows what to expect from Apple, and they’ve come to rely on their software.

The Apple customer hasn’t had too many problems with their Apple products so far, and expect that consumers of rival brands probably encounter a lot more problems than they do.
They expect that because they’ve paid a lot more for their products, and traditional wisdom is that you “get what you pay for”.

This brings up the big question, does buying Apple give you a higher quality product? And is that product so high in its quality that it’s worth the price tag?

Apple fans also love that all their products sync together, something that wouldn’t be possible if they shopped outside of an Apple Store.
Relying on a brand because you trust them isn’t unusual, and every year Apple tests that trust with steeper and steeper price hikes.

Although in spite of their similarities, Apple can’t be too closely compared to a luxury brand because of a few key reasons.

Apple vs Gucci

Luxury brands such as Gucci sell very expensive products, yet products that are made to last a lifetime. A Gucci jacket from the 1980’s won’t just be functional today, it’ll also still be fashionable.
If you start to add up all the cheap jackets you buy every winter and throw away after a single season, a 40 year old well made designer jacket could be seen as an investment rather than a frivolous purchase. The same can be said of a Rolex watch or a piece of Tiffany’s jewellery.

An Apple product isn’t just doomed to fail after only a few years, they’ve been built to ensure they fail. In 2018, Apple was fined 10 million Euros after it was proven that they were slowing down iPhones to force obsolesce and encourage users to upgrade.
Apple states that throttling the phones was an effort to preserve battery life, but the courts felt differently.

The Apple of the Future
Apple has always been expensive, and this made sense in the beginning when they were doing things no-one else was doing.
However when the competition started to out-innovate them, they didn’t back down with the prices. Instead of cutting back and joining the pack, Apple charged forward and started increasing prices more steeply than ever.
The iPhone X represented the most dramatic increase in price for an iPhone until that point. Where the previous base model iPhone was released for $699, the iPhone X base model was released for $999.
The new iPhone X offered some unique features, but is still fundamentally built on hardware developed and purchased from rival companies including Samsung and Sony. iPhone products don’t represent a product you can’t buy from someone else, they represent an ideal and a time in our lives when we needed the innovation they offered us.
There was once a time when they had showmanship. During the days of Steve Jobs, they had the original tech celebrity and everything they touched seemed invaluable.
Steve could come out on that stage and put on a show that made us empty our wallets before he was even done talking.
The show continues today, but less and less people are sitting in the audience. Sales are dwindling, and time is showing that Apple needs to update its model to stay profitable in the new decade.
Will they innovate their model like they use to innovate their products? Or is Apple doomed to repeat the mistakes of so many who came before them? As always, only time and executive decisions will tell.

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I’m a well travelled writer who loves nothing more than a well polished video game, an expertly crafted sandwich, and a hot mug of Milo.

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