Why Apple Products Are So Expensive

The Apple Tax

To become the proud owner of an iPhone, iPad, or MacBook, you have to pay a little something called the "Apple tax." This substantial premium is the price for top-notch, luxury products. Apple can charge insanely large amounts of money because paying more is basically the norm for their devoted customers. Sometimes these prices are mildly off-putting, but recently, Apple has gone way overboard with the most bizarre price hikes imaginable.

This premium cost is infamously known as the "Apple tax," which can be traced back to 2001 when the original iPad came out with a price tag of $399 and was inflated to $579. So how exactly does Apple make its users cough up this hefty tax? Consider this situation: Apple sells its 256GB Mac for $1,299, while a Windows laptop with arguably better specs will have the same price tag. The price is the same, but the quality is not.

Apple has even raised prices of Mac accessories based on the new "space gray" color. For example, the Mac mini was priced at $499 at the entry level, but since then, it comes at $799 and doesn't even include a keyboard, mouse, or display. Apple also revealed their $5,000 Mac Pro display accompanied by a $1,000 monitor stand - $1,000 for a stand, you heard that correctly.

The base model Apple Watch experienced a considerable price hike from $329 to $399, and the most stunning Apple tax was on the iPad Pro, which experienced a price hike by going from $649 to $799. This doesn't even take into account the extra $50 you have to pay for greater capacity, bringing the total to a staggering $1,899 for a maximum capacity 12.9-inch cellular iPad Pro model.

Rising Prices of Chips

The second reason why Apple's products are getting so expensive is due to the rising price of semiconductors. The global shortage of supplies like chips and conductors has raised the manufacturing fees imposed by the world's largest chip maker companies. Apple will be forced to release high-end products to compensate for the cost consequences, and users will have to cough up even more money.

Software Development Costs

Apple is singularly unique for developing its iOS versions from scratch every time an Apple product gets an upgrade or update. This sets Apple apart from Android and Windows, as both of them receive a ready-made operating system from Google and Microsoft, respectively. Apple has to pay for all the research and development themselves, and in 2020, they had to pay a whopping $18.75 billion for R&D. Consumers have to pay for that out of their own pockets, as Apple charges them for directly managing the iOS software.

Psychological Factors

Apple capitalizes on the psychological aspect of its brand. Either you spend loads of money on Apple products for personal gratification, or you feel envious enough to scrounge up enough money to buy the latest iPhone. Apple intensifies this by using age-old formulas like pre-ordering, creating a wild buzz around each new product release.

Slowdown in Sales

The last reason Apple's products are becoming so costly is due to the sales slowdowns. The sales of gadgets like the iPhone, Mac, and iPad have seen a steady downturn since 2015. To compensate for this decline in sales, Apple raises the prices of its existing gadgets to bring in so much revenue that it will cover up for the sales slowdown.

In conclusion, the combination of the Apple tax, rising chip prices, software development costs, psychological factors, and sales slowdowns all contribute to the ever-increasing prices of Apple's products. While Apple may be a trillion-dollar company, their customers are the ones bearing the brunt of these price hikes.