Which Apple product is very overpriced?

Three Rules: How to Understand Apple's Pricing

Jason Snell

The price of the Airpods Max really hurts: Has Apple miscalculated when it comes to pricing or is that a certain strategy?

It is as regular as the four seasons. Apple announces a new product and then there are complaints that it is overpriced. Now, I'll be the first to admit that selling headphones for over $ 600 seems like a lot. Will the Airpods Max (all info) be a success? That remains to be seen - and Apple sometimes misjudges its prices, as it did with the original Homepod.

But in general, it shouldn't come as a surprise when Apple sells a product at a high price. Apple's pricing strategy changes from product to product and from year to year, but it is worth following some basic Apple pricing rules.

There are no bargains here, please go on!

Rule 1 : Apple will never offer the cheapest products in a category. While critics claim that Apple's products are endlessly overpriced, it is more likely that the company is not interested in making cheap products in order to compete with other cheap products in any market.

Could Apple make a $ 500 Mac laptop or $ 200 an iPad? Sure, but it's more about making products that help maintain Apple's brand identity as a maker of high quality, premium products. A cheap plastic Macbook is hard to imagine - and although Apple would get applause for it, would it really make a profit on the bottom line? And how much would it undermine the company's image?

As a consumer brand, Apple is about making customers pay a little more and get something nicer in return. Apple does not enter the market in the cheap segment. If you want a Mac notebook, you have to spend $ 1000 to get a Macbook Air - and you get a really good bang for your buck! That's Apple's brand promise.

The price will always be twice as high

Rule 2 : Whatever you want to pay for a rumored new Apple product, it will be more than that. That’s why Apple takes in all the money. It attracts its customers with products that are so compelling that they (the customers) spend more on them than they want.

My thirty years of experience as an Apple customer and twenty years of experience as an Apple author led me to infer the following principles:

  • Imagine the product that Apple is supposed to introduce. You want it right? Of course you do.

  • Now imagine what you think it will cost. Not what you think it should cost, but realistically what you think it will cost.

  • Now increase the price. This hurts, but keep in mind that even at this price point, you would probably still be buying it.

  • Now add 50 or 100 euros more. That's the price Apple is going to charge. And you will likely buy it, after much internal discussion, with yourself and your home finance minister.

If you use this strategy whenever possible, you will seldom be disappointed with what Apple is touting - and you will occasionally be surprised when Apple actually costs a little less than you expected!

The price is no longer important these days

Rule 3 : Patience and market overview

For a long time, Apple's prices were set in stone. Whatever the company sold a product for in its own stores, it was the price paid elsewhere. With the exception of a few discounts on old or discontinued products, there were seldom discounts or bargains.

That hasn't been the case for a few years. Apple seems to be pursuing a different strategy these days, by setting the prices of its products a little higher to make room for bargains, deals, and other marketing activities.

This strategy became clear when Apple introduced the Retina Macbook Air for more than 1400 euros in 2018. We'd all hoped it would hit the market at the "tried and true" price of around a thousand euros for the Macbook Air, but as Ted Lasso taught us, it's hope that kills you. It cost 1349 euros. Oh no, the old rules (see above) are outdated!

If you don't like the price of an Apple product, the best advice is to keep an eye on various third-party providers such as Telekom, Saturn, Media Markt, etc. here in Germany.

The funny thing about this Macbook Air was that, very soon after its introduction, it was often available at various online retailers for those thousand euros. Another indication of this strategy: Apple offers some products surprisingly early in its refurbished store. The price of 1349 euros was intended for people who were not prepared to shop intelligently and prefer to turn down good discounts.

This is still the case. There was a recent excitement on Twitter about some M1 Macs that were already available at discounts at various online retailers. Dreadful! Was that the sign of bad M1 sales? Probably not. Apple's strategy for discounts and bargains has changed. It's strange, especially for those of us who remember that Apple's prices are extremely stable, but that's the way it is. There are discounts on Apple products now, strange as that sounds.

The power of the brand

So ... those 600 euro headphones. Are they overpriced? The only valid answer to this question will be provided by the market. When people buy them, Apple has picked the right price for them. (And if they suddenly appear on sale on Amazon for 500 euros and everyone buys them there, Apple's marketing strategy has worked!). If sales are below Apple's forecasts, then the price was a mistake.

Product pricing is not a popularity contest. Yes, if Apple apparently sells good over-ear headphones for 600 euros, most of them are probably right to be disappointed. That too is part of the power of brands. They can disappoint their own customers if they make a product they don't want or can't afford.

If Apple brings a product onto the market that is too expensive for its own wallet, the best advice is to wait a while after the product is presented and look around for appropriate offers on the relevant pages, such as ours in the Macwelt price comparison. If the price was really too high, as with the Homepod, Apple will give in and after a while lower prices for it even in the official Apple Store.

But it still won't be cheap to buy Apple products. I don't think that will ever change.