After the market closes and the AppleInvestor trade room doors are shut, I look for a little release, and what better way than to read the most recent dribble, trite and hackneyed comments from Apple analysts.
So, this evening I noticed a growing meme, that Apple has priced their iPads at a premium, as if it is the price that makes the products premium. Do you see the disconnect here?
Price does not make a product premium. Either the product is a premium product in the eye of the observer, or it is not. Either the product is clearly superior in important ways and relative to other similar products in the market place, or it is not.
The price is merely a reflection of the demand for the product. Millions of people are willing to pay a premium price because they perceive the Apple products to be superior, and worth their attention over the competition.
And while it is true that the Apple brand itself carries a premium along with it. That premium you pay, is not just for the logo, it is for everything that goes along with the logo, including the quality, service, ecosystem, the store experience, both online and physical. It also has a great deal to do with the design and innovation, and all the future products you are paying forward to.
People flock to Apple products and are willing to pay a premium, because they perceive value. And different people assign value in different ways. For some it’s the industrial design, for others it’s the ease of use, and still others it is for the mystique and brand loyalty. Each person that purchases an Apple product has their own personal relationship with that product and the company.
But one thing is for certain, if Samsung or Google tried to price their products with this so called “premium,” they wouldn’t be selling much. The only way they can compete with Apple is to appeal to those people that care more about price than value. Perhaps said another way, there are some people that value cost more than quality. Those are not Apple customers.
What is your take?
