Christopher Tong’s Blog

Title: Inexpensive Phones: the New Thing?

Date: Oct. 26

I am interested in this blog, because I want to buy a new phone now, and I have just found out that even if Apple appears to be reducing its price, the iPhone 6 64G is only CAD$110 higher than the iPhone 6 16GB, which is the usual price for 32GB, I still feel it is expensive.

From Apple’s Home

Christopher states that when iPhone 3S was released, its price was $600. Compared to the current price, it was so cheap. But this may be explained by inflation and demand. Inflation: obviously, the value of money at that time was different from that now. However we can use time value to figure out roughly the difference between these two prices. As for demand, when the iPhone 3S was released, Apple had not been generally recognized as high quality technology. So the demand for Apple products is not as it is today. The price mechanism determines  prices.

From OnePlus’ Home

OnePlus one is priced at $300, only half of that of iPhone. But the strategies of OnePlus and iPhone are different. As Christopher said, OnePlus more likely applied the cost leadership strategy, while Apple is more likely to employ quality differentiation.

I think Apple sets these high prices because of its product concept: high quality. What if the prices decrease? I think many people would think Apple has reduced the quality standard. And this may be one factor why the iPhone stays at such a high price.

Cited:

Christopher Tong’s Blog: https://blogs.ubc.ca/christophertong/2014/10/26/inexpensive-phones-the-new-thing/

“OnePlus is more like apply the cost leadership strategy”

https://blogs.ubc.ca/christophertong/2014/10/26/inexpensive-phones-the-new-thing/