Cheaper IPhone will cost more in China
The article by Brian X. Chen and Eric Ffanner told us that the cheaper IPhone, IPhone 5c, is making its way to the market and its price will be cheaper than the “traditional” IPhones. However, the cost of this phone will be $700 more in China compared to the price in the United States.
The overall aim of Apple’s production of IPhone 5c is to allow for more consumers to purchase a similar quality of IPhone at a lower price. However, with the $700 difference in China it is still withholding most of the Chinese market in consumption.
In my opinion, the reason why Apple would like to set a high price in China is because there are a lot of crazy fans of Apple in China.
“IPhone 5S is probably designed for wealthy Chinese who enjoy flashing smartphone the same way they show off jewelry (Chen & Ffanner, 2013).”
Therefore, Apple knows that if IPhone 5c can be sold in China, they will earn numerous profits from 700 million Chinese customers.
As Milton Friedman said “there is one and only one social responsibility of business – to use it resources and engage in activities designed to increase its profit so long as it stays within the rules of the game.” In this case, Apple chooses to get more profit instead of allowing for more Chinese consumers to purchase their items.
References:
B.Chen, E.Ffanner (2013,Sept). Cheaper IPhone will cost more in China. Retrieved from http://www.nytimes.com/2013/09/12/technology/the-surprise-in-apples-cheaper-iphone-in-china-its-expensive.html?ref=business&_r=0
Zimmerli., W. Holzinger, M. Richter, Klaus (2007). The Social Responsibility of Business is to Increase Its Profits.Corporate Ethics and Corporate Governance 173-179.
jasonw 1:11 am on September 12, 2013 Permalink | Log in to Reply
Interesting point you made about going for higher prices and therefore more profit, over a greater volume of sales.