Thursday, September 21, 2017

i-Phone X

By: Sophia Rahman

Earlier in the month of September, Apple unveiled its newest products including: the iPhone 8, iPhone 8+, the Apple Watch 3, and the hyped iPhone X. To most of the world’s surprise, Apple’s iPhone X will be selling at a hefty price of $999. While many people are hesitant to invest in the new phone, others are preparing to jump on board and buy it once it is released to the public.
According to Pew Research Center, 77% of Americans own a smartphone and that “smartphone adoption has more than doubled since the Center began surveying on this topic in 2011.” That means that Apple will, if not yet, have a shrinking demand if they are unable to tap into a new consumer base. Therefore, the obvious benefits to Apple launching the iPhone X at such a high price is that it enables them to charge a higher cost for future products. Although it may seem illogical to have such a high priced item, it is actually the perfect strategy based on their current business needs. With an already large consumer loyalty base, Apple has been able to create the new iPhone with various intriguing features including face recognition and an all around edge screen that has drawn in more consumers at a high price knowing that it will be at high demand.
             
In addition, Apple’s brand has been able to largely influence their product’s consumers. Traditionally, demand for a product increases as the price of the good decreases yet Apple’s iPhone X proves otherwise. Apple has been able to create a situation where this does not apply. Specifically, with the announcement of the iPhone X, demand has increased despite their high prices. This is a result of the instilled status factor that is associated with owning an Apple product. In the world, there are more than 7 million iPhones in use, with that said, Apple has already dominated a high percentage of smartphone usage (Fortune). Also, Apple is able to leverage their brand as a status symbol to increase demand among America’s youth. A recent study done by investment group, Piper Jaffray, 76% of teenagers in America own an iphone. Therefore, this new product is bound to continue propelling their brand as people strive to own an iPhone.
Furthermore, with the high numbers of iPhone users, Apple’s goal in releasing the iPhone X is to create a new consumer base for their highest end product. They are able to do this by using their clout to motivate fans of their brand to purchase their product. In introducing a high priced product line, they will be able to set up consumers for future products that will also be pricey (Forbes). In addition, because high prices are associated with scarcity consumers will rush to invest in the product.
Lastly, America’s economic freedom allows people to tap into their internal desire to differentiate themselves. Apple, unlike traditional investments, has created the perception that owning an Apple product is the equivalent to investing in one’s own worth. Owning an Apple product has become associated with high class status, therefore owning an iPhone is in a way symbolic of achieving the apex of Maslow’s Hierarchy of needs and being a self-actualized person. America, as a developed country, has allowed people to meet their basic needs enabling them to splurge on their wants including technology like the iPhone X. In this sense, Apple has positioned itself positively when people are considering other ways to invest their money. As said before, many Americans purchase iPhones. Therefore, it can be assumed that many Americans view iPhones as a better opportunity cost and now that the iPhone X has been launched, Americans will be lining up to purchase one, further proving that the iPhone is valued more than another option.
In conclusion, Apple has made a big splash with their announcement. From a business standpoint, it makes perfect sense to give the iPhone such a high price. On the contrary to what critics might say, it’s likely that Apple will succeed by exploiting our natural inclination to better ourselves and fulfill our desires.


Works Cited
Armstrong, Paul. “Apple Introduced iPhone X For One Reason And One Reason Alone.” Forbes, Forbes Magazine, 13 Sept. 2017.

Reisinger, Don. “Here's How Many iPhones Are Currently Being Used Worldwide.” Apple iPhone Owners: Here's How Many iPhones Are In Use | Fortune.Com, Fortune, 6 Mar. 2017.

Smith, Aaron. “Record shares of Americans now own smartphones, have home broadband.” Pew Research Center, 12 Jan. 2017,

Startlr. “Startlr.” Startlr Tech Blog, 12 Apr. 2017.

30 comments:

  1. No matter what your excuse is, a phone should not be one grand. For that price you could use that money for something more useful. The only upgrade is the no home button and face lock screen, so just getting into the phone is the only difference. This money could go to something more beneficial to you or the world.

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  2. Buying phones is good for the economy. When consumers buy products the economy gets better and it helps with economy growth because they spend more money on goods and services. The more they buy the better the economy growth will be. Buying iphones also helps the resources. As Apple increases their technology on the phones the growth will increase.

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  3. The iPhone X seems to be a big demand for those loyal customers as you discussed and I agree that Apple depends on those customers. They would not release a product at a steep price if they knew it wouldn't sell. People want the newest thing at whatever the cost may be, and in comparison, future products will not seem as expensive.

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  4. Even though that apple products are good and improved, they shouldn't cost as much as a computer. This is just the start as stated in the article this is a strategical path. So that they can keep raising the price. Even if the phone is 2 thousand dollars people will still buy it. That is why this is good for the economy because people through all their money towards their product. (Zach Roelandts)

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  5. The main reason for the IPhone X's price is as you said in the article, that it is less about the new features and more about the social status that comes with it. IPhone have for the most part been the "coolest" smartphone to have. This is because of many reasons but since this fact is so evident, more people will be encouraged socially to get this product as soon as they can. This is why I think banding is so important. Apple is able to cell their over priced phones and people buy them, and the people who buy them know it is expensive which makes having the phone more "cool" to have as less people are able to buy it, but the people who can are likely to do so.

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    1. I agree with the statement around people feeling socially obligated to get the phone. It really is just the "cool" thing to do especially for young kids that don't really need the phone or features but like how they know it is a scarce product and would make people maybe think higher of them

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  6. You’re discussion about the demand increasing with price decreasing for most products was very interesting and I enjoyed how you compared it to the iPhone X. The fact that wants and needs are reaching the point of “needing” a nearly $1,000 cell phone is slightly ridiculous to me. As many have said, apple is only increasing the price of this phone in hopes to have substantially higher prices for all products in the future without causing commotion about it. I agree that Apple is dependent on all consumers; however, with all of the pieces of technology that they have released, I believe that consumers will reach a point of exhaustion and not be able to pay $1,000+ for a cell phone when their current device may work perfectly.

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  7. Though I understand Apple's standpoint on pricing their phone so high, I will admit I see it as unethical. Though clever, a multi-billion dollar industry does not need to price their product so high. Apple is taking advantage of the demand issue and pricing their phone higher because they know their customers will buy them, no matter what the price. They are brainwashing their customers by showcasing a "super improved product," making the hefty price tag fly over their heads.

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    1. I agree that Apple is taking advantage of the consumers, but from a business perspective all they care about is making money and that is their way of making money, keeping the prices high.

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  8. I liked how you added in a bunch of economic terms and highlighted them. They all flowed well in the blog post and I didn't feel like you forced them to be in there. I liked how you talked about apple's loyal fan base and how apple is strategically raising the prices of the phones so that they can charge more for the new phones coming out later. This also was good because they added more features making the new customers and loyal ones wanting to make the investment. I can relate to this topic well as I am an apple smartphone owner, but I won't be making this investment as it doesn't feel necessary to me and I would much rather wait til the scarcity of the product goes down and the price then will go down. Plus I like to use my phones until the life runs out on them.

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  9. Overall the iPhone X does interest most of Americans but I have to disagree with the amount that will buy them. The opportunity cost for a phone that costs $1000 is insane. I don't think many Americans while have that amount of money to spare. The opportunity cost of saving that money for when the cost of the iPhone X drops will be a better investment.

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  10. I enjoyed reading your article about the Iphone X, because it was intriguing and everyone wants to know about it. Like you mentioned, it's price is severely high and the main reason is because of its social status. This all really comes down to needs and wants, because no one really needs this $1000 phone, they just want it to have it and brag. Also it's just crazy that Apple can get away with these ridiculous prices, because if we actually followed through with not buying the "latest and greatest" then Apple wouldn't be making any money and could then potentially lower its price. Overall it is right to say that people don't care about their opportunity cost with Iphones, because they could be using their $1000 for something more useful.

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  11. Iphones are a big thing that apple fans buy every time a new one comes out, but you have to think as the prices are starting to get higher and higher the amount of people buying them have to start going down which will end up hurting the company. They will have to look at on their profit to how many units they sell. If the price is out of range people will start turning to alternative products or companies

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  12. I think this piece about the iPhone X is very interesting and provides a lot of information. Apple is making smart moves. I found it interesting when talking about the high demand. With the price of the iPhone at $999, apple will be making a lot more money than with past models. I thought paying $350 for my iPhone was a lot, but the demand of the new and best model allows apple to do that, and will have people still purchasing it. This trend of pricing higher and higher for the newest product will only go on and on for years to come. With the use of all of the vocabulary, it was a very nice piece, and helped me understand terms easier, like scarcity or price of the good.

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  13. I really enjoyed your topic and you did a very good job relating it to supply and demand. I am interested to see how the sales of the iPhone X will do because of the extreme price, but I have no doubt that because it is an apple product, many people have it on their list to buy. In your second paragraph, you said that it was the perfect strategy for apple to increase the price so much in order to set themselves up for the future. I disagree with this because I think that the higher the prices of the phones get, the less people are going to want to buy them and they won’t be in as high demand anymore. Overall, I really enjoyed reading this article because many people are intrigued by it and want to understand all the buzz.

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  14. Although the I phone X looks amazing is it really worth $1000? What is the point of upgrading to the I phone 10? Does it give you a higher stature just because you have a $1000 phone? Sure people will say that it was a bigger screen or you can unlock your phone with your face and has all these new features. Personally if you want to upgrade your phone, I believe that you are better off going with the I phone 8 instead of the 10 just because the I phone 8 is pretty much the same and is much cheaper.

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  15. This is a very interesting article about the iphone X. I honestly hadn't paid much attention to how much it costs but it makes sense that the prices are so high. They keep the business going in a way that helps the creators to produce new better features to the future phones. Although it's pricey I also think that we're lucky the products aren't a higher cost.

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  16. It’s crazy to think that they can raise the iphone as expensive as they want and people will still buy it. I also do think it's ridiculous at how much an iphone can cost at a company that’s worth millions and how many people give in because you want to have the new updated technology. I don’t think it’s necessary for a phone to be that much and they should use that money on something better. Although, i'm an iphone owner, I still think it’s overpriced and will wait for the prices to decrease before i make my next purchase. Other than that, I liked how you added the vocabulary and highlighted them so that it really stood out.

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  17. I want to get the iPhone X when it comes out. The iPhone X is the boujee version of the iPhone 8. Apple’s strategy is logical and will be beneficial to their company; by making the price for the new iPhone higher, and since they will be in high demand to purchase, Apple will be making more money in result of the high demand and high price.

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  18. Apple is quite good at putting sprinkles on cupcakes and slapping a hefty price tag on that cupcake. When people compare the iPhone X to the iPhone 7, there isn't many noticeable differences. Sure, you get a better camera, 'true' colors, 3D face recognition, and all that other fluff, but the opportunity cost in order to get these (semi-useless or barely noticeable) features is extremely high. Why would you need your face to unlock your phone when you primarily use your finger to navigate your phone? Isn't the fingerprint reader all you need? Despite this, many people will buy the iPhone X in order to look cool because Apple does a great job of promoting their image and staying in style with the young adults.

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  19. I agree that the iPhone X will get sales, but I think it will start to happen until later in the future. Apple customers will want to upgrade their phone sooner or later, so customers will wait until the price drops on the iPhone X. It's no surprise that the iPhone X is the most expensive product because they want to make the product more scarce. They will have deals during certain times to make it seem like the sale price is a good deal. But I think Apple could make way more revenue if it was a couple hundred dollars less. (Vinny Rondinelli)

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  20. Like you mentioned, Apple products are a symbol of wealth as well as a huge status symbol, with that in mind it makes sense to me why Apple would increase the price of their products, specifically Iphone X. like you stated, Apple knows that their fans are loyal and will probably pay "the price" for the newest gadget or phone. Yet in my opinion, I think that the loyal fans might have a harder time investing in a phone that is 1,000$. And if you think about it, most apple fans who would put this new Iphone as a "Need" or even a strong desirably want, are teenagers or young adults. Most people in this market are either trying to pay for college, make a living or still living at home in Middle and High School, and I'm pretty sure that no parent is going to want to pay a whopping 1K for their child just to be a bigger distraction. With that said, the new phones do bring a lot of new enhancements and fixes that many phones don't or won't have, and people could argue this could make life easier. Either way, I think that you post is well written and shows both the pros and cons of the new Apple prices.

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  21. I think that the Iphone X will be in high demand. The last couple of Iphones that have come out have been basically the same thing. The only things that have gotten better is the display quality and the camera. There has been no noticeable difference between the past Iphones. But the new Iphone X has 1 big noticeable differences, the new screen. People like when they change things up and make things look different. I think that will cause a lot more people to want it and the make the demand of it go up.

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  22. People want the I phone 10 to use it as a status symbol for wealth. Apple said during there key note, that this I phone is rare and they only made a limited supply if the product. They still have the basic but now improved I phone 8. But if you declare that a product has all these good values people are gonna jump on that bandwagon. People want to feel different and have a one up on something else. And apple has a lot of different celebrity endorsement, and if people see there idol with it they are gonna go and get it. America has a giant consumer marker everyone wants wants wants!!!.

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  23. It's simply crazy to think of the change even since we have been alive in the phone situation. I remember seeing many people with flip phones and sliding phones, nothing near what the Iphone is. This honestly shows how quickly something can become popular. As more and more people try it out and like it, others have to jump on board to "fit in" and be up to date. Apple truly does realize that this will continue to occur with every new Iphone they come up with. This is how they are guaranteed sales and profit--they clearly know what they're doing. The Iphone X will surely be no different as demand is always is existent. Even with the high price people will surely pay it due to their desire to have the best of everything.

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    1. I definitely agree with Liza - less than a decade ago, people were looking for new mobile phones and, at the time, that demand was set at a market that included flip phones and phones with keyboards, not touchscreens. Now that the technology industry appears to be booming for Apple (possibly a rightward shift of the supply curve), people are figuratively selling an arm and a leg to pay for this "upgrade". In reality, our current iPhones can last longer than 1-2 years, but Apple's annual release/launch conferences make us think otherwise, thus allowing the demand to increase for Apple products. People want more. People want new. And people want to be in the "now" because being out-of-date is relatively obsolete. Going off of Liza, Apple itself has all of their consumers tied on a string and changing prices will not effect their sales because people are willing to continue purchasing from Apple. They are already hooked on the California-based company and switching to Samsung or Sony phones seems 100% out of the picture. Again, this new release will just seamlessly help Apple because the demand for their products stays fairly, if not very, high.

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  24. I love your viewpoint on this topic and completely agree. Although $999 for a smartphone, to the average American, seems simply ridiculous, Apple has positioned themselves flawlessly in the business world so that consumers will pay this hefty price anyways. Not only do their products promote a social hierarchy, making those who own them feel superior, but their consumer loyalty is at an all time high, creating a perfect setup for them to release a new phone with a high price. It's very smart.

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