There has been so much talk over whether or not Apple has been keeping up with its competition ever since Steve Jobs passed away and left his legacy to Tim Cook. Most times than not, we always hear customers complaining about how Apple isn’t able to keep up with the technological advancement that Samsung has been able to apply in their products, and that Apple simply isn’t listening to what the customers want. This isn’t too surprising, as the motto Jobs thrived upon was that

“people don’t know what they want until you show it to them.”

People have also started complaining about Apple’s pricing strategy as they started to expand their product line. From a fellow Sauder student’s blog entry, we can see that “the unlocked iPhone 5c is listed on the apple store for between $599 to $719” and they “believe that this practice is slightly unethical as it is not using ground breaking innovation to sell its product rather its name and fame”.

I disagree with the above statement, and here’s why. Since the birth of this multi-billion company, Apple has overcome obstacles and been one of the most innovative technological firms in the whole market. Their easy to use interface, and their unique OS has created a strong and unbreakable brand loyalty over the years – no matter what other companies may have to offer, many people, including myself, have chosen to stay with Apple. So is it really unethical for them to charge prices higher than their marginal costs? No, because thats what most firms do anyways – in order to make a substantial amount of profit, Apple, as among other companies, charge prices that pass way over their total cost for one unit. And why shouldn’t they? Their target segment is willingly handing them money to get their hands on whatever products they have to offer – Apple is THE brand in the tech industry, so the brand itself adds an intangible value to the product, hence increasing the price. The price of a product, especially for established brands, doesn’t arise from the costs alone, part of the price is most definitely derived from how much the market values the company and the brand as a whole.

So yes, Apple created an ‘in-between’ product, and yes, the features themselves of the 5C don’t match up with the price, but the brand definitely does.

https://blogs.ubc.ca/shubhankarrustagi/2013/10/01/iphone-how-much-does-it-really-cost/