Should Apple Lower Prices In Post-Jobs Era?

It’s inevitable that without Steve Jobs at the helm piloting the Cupertino ship into the future Apple will change. What that change will be and how quickly it comes are both up for debate, but I don’t think it can be argued that everything will remain as is. After all, isn’t the very essence of Apple to ‘Think Different’? To change things around, to adapt, to be the disruptor?

Sure, even with Jobs having departed the company, many of the names and faces at Apple remain the same. But Jobs is known to have micro-managed since he returned to Apple and transformed the company into the behemoth it is today. With that guiding force gone for good things are all set to change.

One of the key components of Apple’s winning strategy has been its premium pricing. Apple products have always been expensive, the choice of those not on a budget, for whom the need for quality overpowers the need for affordability. But that strategy is already changing, and could change even more as the company heads further into the mainstream.

The question is, should Apple cut its prices across the board?

The Argument For

Apple is now about as mainstream as they come. What was once the small, independent-like company fighting against the big corporation that was Microsoft, the roles have changed. Apple is now rich, powerful, and a member of the new mega-corps. With that status comes a responsibility to lower prices. People now want to own Apple products more than ever after buying into the brand, and for people to do so in bulk the prices need to be lower than they currently are.

Apple can also afford to cut its prices. It famously now has more cash reserves in the bank than the U.S. government does. The iPad, which is the first of this new breed of affordable Apple products, is fairly priced, and yet Apple is still making a healthy profit on each unit sold thanks to the scale of its production line and the methods it uses: Chinese labor is cheap.

The Argument Against

Apple could lower its prices quite easily, but should it do so? The fact is it doesn’t actually need to. The iPad is a phenomenon, selling millions around the world and still being the cream of the tablet market despite various attempts by rival manufacturers to match or beat it. The Amazon Kindle Fire could derail its dominance, but that isn’t guaranteed. Meanwhile while the iPhone isn’t the best smartphone money can buy it is the one people invariably crave owning. And they’re buying even slight upgrades en masse.

There is also an argument that lowering prices could actually harm Apple in the longterm. While the company will gain more customers, those ever-so-loyal fanboys may turn their backs when the great unwashed join their little club. If Apple products become so affordable that the proletariat can buy them then expect some Apple fanboys to seek the next tech company selling overpriced wares.

It’ll be interesting to see which way new CEO Tim Cook goes on this one. If he gets it wrong then Steve Jobs’ legacy could soon turn to dust.

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One response to “Should Apple Lower Prices In Post-Jobs Era?”

  1. Geek_News Avatar

    Apple is going to have to do something in the post Jobs era. They are loosing ground in the smartphone and app arena and if these patent judges ever get things straight they will loose even more. Apple has failed to diversify itself, instead opting to hoard capital will other companies have built decent portfolios.

    Apple won’t slip silently into the night but unless they come up with something new and exciting in the next few years they might find themselves right where they were before Jobs returned to Apple.

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