What Apple taught me in 3 years!
September is always an eventful month for iPhone enthusiasts. Techies are flooding the internet with their reviews on Apple’s newest addition to iPhone line - #iPhone7. I still remember how excited I was on the day I bought my first Apple phone, iPhone 5s on its release date. But since then, I kept a watch on the retail price of iPhone only to discover a steady and controlled decline over time.
Have you ever wondered why there is a hype over the release date?
The specs are never revealed in advance but tend to “leak”!
Why so many rumours?
It’s how Apple creates a halo effect on every release that ends up in people craving for new Apple products. Now I did some research on all this and learned about Apple’s premium pricing strategies, which includes Manufacturer Suggest Retail Price (MSRP) and Minimum Advertised Price (MAP).
MSRP of a product is the price at which the manufacturer recommends the retailer to sell the product.
MAP is the agreed price a reseller agrees to advertise a brand or product at.
I also learned how powerful they are to control the retail prices in different channels and in balancing the online price to keep the profit share high.
To understand this better, let’s consider two examples iPhone 5S & iPhone 6. Prices from two major retail outlets in Qatar are being taken for comparison purpose:
1. iPhone 5S (16 GB) released on September 26, 2013
Retail price on release: Qr. 3,899/-
Retail price today: Qr. 899/-
As per the straight line method,
Annual depreciation expense =>
(3899-899)/(3 years) = QR. 1000/-
2. iPhone 6 (16 GB) released on September 19, 2014
Retail price on release: Qr. 4,799/-
Retail price today: Qr. 1,869/-
Annual depreciation expense =>
(4799-1869)/(2 years) = QR. 1,465/-
So, the Average Depreciation cost is QR. 1,200/-
Having brought the iPhone 5S, I have been losing QR.100/- every month (or QR. 1,200/- every year) for 3 years. It was the price to stay trendy! A victim to massive pricing strategies.
Frustrating though it sounds, I am actually glad to have learnt such an important lesson in Pricing, one of the four Ps of Marketing.
Cheers!!!
I would say the same - don't waste time and money, better go an buy some books to read from the list of books for students
A Clockwork Orange is on my to-read list now. Hope to read it till the end of the year. I read 1984 – George Orwell last summer, and it was really a read for me.
You are trying to explain something really big, without providing enough details or reading about it more to explain it, Apple is not the only one, in fact their phone price stays steady compared to other brands, you should make a comparison at least. It also happens with Samsung smartphones and other things such as TVs, cars .. etc
Even though you claim having understood Apple's pricing strategy you are still stupid enough to fall for it. That doesn't make sense unless you are really an idiot.
Buy only if u really are going to use it's features.
Wait until a neighbor's wife discards her new phone for the latest model .. Do not waste money on unnecessary things