Economist to Apple: This is a Premium strategy can’t go on and on

Apple has shocked on Wednesday with bad Numbers. The first consider whether the iPhones are too expensive. Finally, Apple sells the iPhone XS with a large screen for 1249 Euro. The iPhones are just too expensive?

Undoubtedly, the devices are very, very expensive, and significantly more expensive than the equipment of most of the competitors. So far, Apple is not dangers, however, with this strategy bad.

What is the strategy behind it?

The logic behind such strategy is, of course, that damitje sold unit can be achieved a very high margin. So Apple needs to sell much less units than the competition, in order to achieve a comparable profit. And it worked in the past, almost textbook. To other Apple devices, this – rather than the devices of the competition to be a status symbol. Only a few consumers can and want to afford such a device. And thus, Apple’s customers can communicate their Status with the help of these devices to their social environment.

And what are the dangers of this strategy?

This uncompromising Premium strategy can not of course go on and on. At some point, the group of consumers that can be reached is still to small. Previously, Apple seemed to have a good sense of the best price point. But, of course, dependent on a relatively small group of Premium customers.

this Is what Apple does to create now?

it May be that some customers will now look in the face of these high prices, more precisely, whether the price is a matching – as Economists say – the functional or social Benefits. And if consumers get this balance to a negative verdict for Apple, it may be that you postpone the purchase, or even to the competition switch.