Apple is ‘very aware’ of concerns over high iPhone prices

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Which new iPhone is for you? It really comes down to size.
Apple knows the iPhone is getting too expensive.
Photo: Ste Smith/Cult of Mac

Apple COO Jeff Williams says the company is “very aware” of concerns over the rising cost of the iPhone and Mac computers.

Williams, who delivered a brief speech at Elon University in North Carolina on Friday, also disputes analysts’ estimates of component costs for Apple’s products. (Results of a recent teardown suggested a 256GB iPhone XS Max can be manufactured for just $443.)

Apple has long been criticized for its hefty price tags. And Cupertino’s best products have never been cheap.

The success of the $1,000 iPhone X helped drown out some of the concern from analysts. However, with the 2018 iPhone lineup struggling, the pressure is piling on again.

Apple CEO Tim Cook already admitted that the company will “rethink” its prices, particularly those for the iPhone. Now, Williams has reassured fans that Apple is “very aware” of their concerns.

Apple isn’t ignoring price problems

“We do not want to be an elitist company,” Williams said during a question-and-answer session at Elon University on February 22. “We want to be an egalitarian company, and we’ve got a lot of work going on in developing markets.”

During his short speech, Williams talked about Apple’s insane growth since he joined the company as head of worldwide procurement in 1998. The iPhone played a massive part in that. But with demand for the latest models falling, Apple faces growing concern that its glory days are over.

But is Apple really pushing up its prices just to claim even bigger profit margins? It seems the costs to manufacture its most popular devices aren’t as low as many reports have led us to believe.

Apple products aren’t cheap to produce

When probed by a student about Apple’s rising prices, and the estimates that suggest even the most expensive iPhones cost less than $500 to manufacture, Williams explained that analysts have it all wrong.

“The stories that come out about the cost of our products [have been] the bane of my existence from the beginning of time, including our early days,” he said. “Analysts don’t really understand the cost of what we do and how much care we put into making our products.”

The iPhone isn’t the only costly product Apple sells, either. The company goes to great lengths — and great expense — to make the Apple Watch a lot more than just another fitness tracker.

Williams described how Apple built its very own physiology lab, with 40 licensed nurses, and enlisted more than 10,000 study participants to develop some of Apple Watch’s most important features.

How will Apple stop falling iPhone sales?

Apple already cut iPhone prices in some markets in an effort to reverse falling demand. It also joined forces with Alipay to make the device much more affordable for fans in China. But future ideas for boosting iPhone sales remain unclear for now.

Many fans hope that this year’s iPhone lineup will bring smaller price tags this fall, but it would be very out of character for Apple to cut prices on brand-new devices.

Via: The Times News