Apple is a luxury company, but not for the $449 AirTag Hermès pricing

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No, this will not be an accident on how expensive Apple products are, even if the company sells its fair share of eyebrow enhancers like the Mac Pro’s $ 699 Wheel Kit. It’s trying to find the reason why Apple product buyers are behaving as if it’s a luxury company, even though it’s apparently not Gucci, Ferrari, or, yes, Hermès.

In parallel with Introducing the $ 29 AirTag tracker, Apple immediately listed one AirTag Hermès luggage tag from $ 449 for a piece “heritage Barénia leather with contrast saddle stitching. “We save you the excitement, Barénia is leather. Admittedly, high quality but still just calfskin. The engraved AirTag is $ 29 and the rest is the selection of luxury goods.

This fits perfectly economic science definition of luxury supply: “if income increases by 1% and demand for a product increases by 2%, then the product is a luxury item.“Even without pulling their wagon to a brand like Hermès, though Apple products are still far above the sum of their parts Apple continues to pull it every quarter.

That is the very definition of a luxury brand, to the extent that Apple is the most valuable company, even though on the front page it only sells consumer electronics, a business that traditionally comes with razor-sharp margins.

How does Apple do it?

We recently came across an ad where a girl was selling her Galaxy S21 Ultra, which randomly states the reason for the sale as an “upgrade to iPhone.” What do you say?
The green Android blood started to boil as there is hardly a phone that is more camera, display or battery compatible than the S21 Ultra, yet in the mind of the user a switch to an iPhone with its poor screen refresh rate, the app fortified the garden, and so-so camera specifications, was considered an upgrade. How did Apple products manage to become such a status symbol?

  • Emotional attachment: Steve Jobs made sure to sell people an access to an exclusive world with cult-like secrecy surrounding its inner function. Heck, it took iPad Pro 2021 for Apple to quote how much RAM it has inside!
  • Fire power: Apple is the most successful brand in the world’s most visible and marketing heavy market. If your country had a company like Apple, would you still buy iPhones instead? It’s a self-fulfilling patriotic prophecy in the world’s most media-covered market for better or worse, and half of American users now carry iPhones and further reinforce its message.
  • Quality user-centric products and ecosystem synergy: Steve Jobs was not the first to put a computer in his pocket, but he made it easy to use, and Apple continued to add the ecosystem to such ‘it just works’ products with a focus on design, software and performance, most successfully so far.
Apple, for example, avoids selling midsize at high prices because it has created an aura around its name similar to what traditional French or Italian luxury fashion brands have done, but that’s just part of it.
What do you think is the reason for Apple’s status for luxury goods, therefore pricing – status, quality, brand visibility, device synergy, all of the above, is something else?

Why does Apple get away with pricing its products as luxury goods?

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