Apple did something unexpected with the price reduction of the iPhone. In the past, we have seen Apple’s tendency to keep the price of its products always higher than its competitors. They always made their intentions very clear. Apple wants to be known as a niche product maker for a niche market than a mass market manufacturer. But this perception changed with the price cut on the iPhone. Sure, much of the price cut is offered through the subsidy from the mobile operators - but it is definitely an attempt by apple to reach among the masses and create a huge base for its mobile device.
Going by the same logic, Apple may attempt to boost its market share in the PC/Operating systems business by considering a price reduction to many of the products, including the entire laptop line and iMac desktops. This could possibly trigger a mad rush for these products coupled with the the halo effect already created by the iPhone. Recent reports say that Apple’s current market share in the PC business is around 8%, which is a very impressive gain from about 5% a few years back. As it is fast approaching the double digit mark, Apple should re-evaluate its pricing strategy so as to attract more new customers.
{ 3 comments… read them below or add one }
George 07.07.08 at 10:10 pm
Unless subsidized subscriptions come back again for PCs (this was tried by various ISPs and gradually eliminated) ipods, etc, why would you expect the price of other Apple products to come down in such a grand manner? The new iPhone is a subsidized product. Some estimates are that it actually costs AT&T more than the previous phone.
jaganath 07.07.08 at 10:17 pm
@George
I am not saying that other Apple products are going to be subsidized. For example the Apple Laptops and desktops are currently sold at a premium. If apple can cut down some of these margins and pass on the benefit to the customer, there will be more interest for these products.
Neil Anderson 07.11.08 at 9:43 pm
Increased demand will bring lower cost of quantity parts which will be passed on to the consumer. Witness the price drop for the MacBook Air when the cost of SSD decreased.