this post was submitted on 02 Nov 2023
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Apple
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If you want to say they’re greedy and pricing people out, that’s true. But don’t confuse this with a lack of business smarts.
When pricing products, there’s a balance between charging more to increase margins, and charging less so more people will buy.
Apple absolutely doesn’t play the latter side of the scale and never has. The problem with “charge less and sell to more people” is that it becomes a race to the bottom. With thin profit margins you need staggering volume to still make money, and that’s hard to do when everyone is undercutting each other.
In a nutshell, “charging less” is something anyone can do. But making products people will pay a premium for, that’s hard. And that’s what Apple does. Their products have minority market share, but their profits are massive. That’s what you’d call business smarts.
That’s an old fashioned view that business moved on from in the last ten years. It’s all about Environmental,Social and Corporate Governance (ESG investors are in control now at the big investors) with governments and regulators around the world setting rules. There’s a reason Apple is trumpeting its green credentials.
So if a company wants to attract money its needs a strong position. One aspect is the concept of fair value. It gets away from older concepts such as cheap and premium. A product should offer fair value. That means that what it offers is commensurate with the cost to the consumer. The consumer chooses whether the product or service offers fair value. Those companies that offer fair value will attract more investors and more customers.
That’s why I say they are lacking in modern business smarts.
So… ESG investors are in control now and they don’t want to see companies charging too much.
…
I realize maybe I should verify: which planet are we talking about? I’ve been talking about planet Earth.
If you are as well, you either have more business smarts than the most valued company in the world or… less.
I didn’t say they don’t want to see companies charge too much. Fair Value is not about the price but the value you get for that price.
I’m talking this planet. Just look for ESG funds and ESG compliant companies. They are valued at over 53 trillion dollars according to the UN.
ESG reporting is now mandatory and a part of accounting standards in the US, UK and the majority of countries.
Incidentally, try investor.apple.com/esg/default.aspx
You’ll find Apples reports back to 2021.
Well I definitely think you’re overestimating this influence. And I think the other issue here is that you are conflating the price point that you personally are willing to pay with Fair Value. If you want to show some kind of analysis of what you think fair pricing should be, great, but this post is just “I cancelled my subscription” and you’re claiming that your decision has all the force of global investor trends behind it.
No, I was responding to your old fashioned views about pricing. Do you see the difference between fair pricing that you mention and fair value ?
The whole point with Fair Value is that the consumer has control. It’s not about fair pricing. It’s about what you get for that price being fair value.
Nowadays a company needs to define its target market and ensure that target market gets fair value. A product can have any price as long as its target market thinks it’s fair value.
We’ve seen some companies innovate and open up new markets that haven't been served before. For example social tariffs that attract consumers who wouldn’t normally subscribe.
It’s not just me saying this. Many commentators and analysts have pointed out that some companies (not just Apple) are taking a rather basic approach and actually removing value. The whole idea with Apple one was to add value but now that seems to be changing. They are retreating to what they know, put up prices without using their business acumen to increase value.
I have Apple one. I will not be cancelling. I consider it an amazing value. I don’t need the iCloud but my mother takes way too many pictures of the kids. She gets value out of that. We all get Apple TV. I use Apple Music every day I’m at work.
Why do you get to choose what is fair value and I don’t? If the consumer gets to choose, than that means the average of all potential (because there is a large subset of consumers who will never use Apple products) customers’ willingness to pay the price must be taken into account.
I understand that it’s not a fair value to you. But it certainly is to me. Even just the hour a month I save not walking through with my mother determining which pictures to delete is worth it alone. In addition to time, I get services I use and value. I consider it a deal tbh.
Bro wrote 3 paragraphs to say he doesn't like talking to his mother are you for real
I love talking to my mother. I talk to her almost every day. She’s the best. I don’t like spending my time sitting there going over pictures to free up space on her phone because she couldn’t take pictures at my nephews basketball game because her phone is full. If I can pay a little bit of money to save mine and her time, would that not be better for both of us? I get my time, she doesn’t miss out on pictures. What I’m saying is if I can afford something to make my life easier, that doesn’t make me stupid.
Also you will notice that in my first comment I said “ I value the ease of use for my mother more than the cost of a subscription”. I don’t see how that implies I don’t like talking to my mother, but I’m sorry you interpreted it that way. I think the snark was unnecessary, but that’s okay. I also see that you didn’t address my actual point. Did you have something relevant to add to the discussion, or is your purpose to insult people?