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.
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.