I’ve just purchased a new phone – iPhone. It looks and feels great, the design and functions are incredible. Whatever you might be looking for you’ll find it here. Apple is known for its unique design and ability to fulfill customers’ desires. No one would argue that Apple has one of the top brand names in the world.
But now let’s look at the different side of the story. Being successful today is not enough. Once you are on the top you have to stay there somehow. You always have to look in the future, trying to figure out potential threats that the company can face, and Apple is not an exception. Let’s look at scenarios that are very likely to happen unless the company is going to take some measures to prevent them.
Although Apple is known for its high quality products, it has difficulties on some of its products' quality control. There were several problems with faulty screens of iPod Nano and faulty batteries on iPods. They just came up with iPhone, which I really enjoy, and I hope that either the screen or the battery will be good, otherwise I’ m not buying any Apple products in the future. I think Apple is concentrating more on internal engineering than on the market. It is always good to impress customers with new products, but at the same time you have to make sure that the quality is high. The computer industry is very competitive, there are so many new and innovative products being created every day. To stay on the top, Apple must continue to invest a lot of funds in R&D as well as in quality control.
Another thing that I’ve noticed about the company that it hasn’t issued any dividends to its stockholders since 1995. In the future, it may cause the investors to lose trust and confidence in Apple. The company has increasing earnings and, therefore, the ability to pay off dividends. The company should improve stockholder loyalty by start paying dividends and put themselves in a better competitive advantage in the future.
One more scenario that is very likely to happen is that Apple can have decreasing sales due to high prices of its products. The economy looks unstable and paying at least $1,300 for iBook (laptop), and somewhat ranging from $150 to $ 400 for iPod (mp3 player) could become problematic. High prices will discourage customers from buying Apple products. The company must review its pricing strategy and decrease the prices to the point where profits are still increasing. Also, it might decrease its costs to produce the products as long as the quality is not sacrificed.
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7 comments:
Is true that if Apple lower its prices on its products probably they will increase its sales and still make a lot of profits. However, I don't think there is anything wrong with Apple pricing strategy and I do not agree that Apple should lower its price. Since its innovative, upscale products have always been on top of its other competitive and still earn huge revenue meaning that consumers are willing to spend the money on Apple's product and be loyal to the brand. However, if you do think Apple should lower its price, how many percent should Apple lower its price to?
Great post, I totally agree with the pricing of apple. That is one of the main reasons I decided to not buy the iphone or itouch. They are getting crazy with pricing and its shows. I say lower the pricing I love apple but not that much.
Apple is not to good with their customer service either. good choice
Hi, Kyle,
I m not sure what percentage exactly they should go down by, but as I mentioned, they probably can go down on the price to the point where they are still profitable. That would require Apple to figure numbers from their statements. I m sure they have a room to go down. Also, as Marcos said, and a lot of my friends, people do think that the high price is one of the major factors driving Apple's sales down and discouraging them from buying the product.
Nice analysis of Apple you have here.
I agree that Apple doesn't have the best quality control on the products it sells and the customer service is pretty distasteful, however their products sell on the innovations that Apple offers. They don't really do much to boast the top quality of their products. They like to showoff the advanced technology or usability of their products. Coverflow, iPod with touch, the iPhone, the new Leopard OS X for Mac, all have great features, yet never have I heard anything about the guarantee on product quality.
I do agree that Apple's prices are too high, but I don't agree that their high prices can pose a real threat now. I think that cutting the prices would be fantastic; however, keeping the prices the same wouldn't affect their sales negatively. The image that Apple has created for itself is one that says Apple products are fancy, but expensive. I have never seen a cheap Mac product, unless no one wants it anymore. The high prices have little no effect on consumers that have already planned to purchase one of their products. The fact that Apple products are so different, and somewhat revolutionary, from other products in the genre, keep consumers thinking that the higher prices are somewhat realistic. I think that increasing the quality on the products and customer service might definitely help their sales, though. They make enough money to put some into those areas.
Nice post-- Karup
I agree that Apple's product tend to be low in quality from my post experiences. They are trying to improve and resolving the problem by providing free exchange service once you find the devices are broken. In case of the price, I think they have been investing a lot for being the first mover in the market so they deserve it. Nevertheless, they have been decreasing the price of their product after a period of time to attract more customers.
High price can be hurt company's sales, but Apple try to create and mentain great relationships with costomers such as providing a work shop. People will buy apple prodcut and pay for the services.
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