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The Greyhound

The Student News Site of Loyola University Maryland

The Greyhound

Apple gouging its customers with absurd prices

It’s very possible that you just put your iPhone down to read this article. On college campuses and in the general public, one can look around and most likely see an over-abundance of iPhones. There is no doubt that Apple has taken over and dominated the mobile phone market. According to Fortune Magazine, roughly one in every four adults owned an iPhone at the beginning of this year. The company is fully aware that they make one of the most desired products on the technology market. But are they abusing that staggering market share?

The first iPhone was released on June 29, 2007. Since then, seven more generations have hit the market with much success. The newest models of the phone, the iPhone 6 and 6 Plus, were released last month. Without a contract on a wireless plan, the two phones sell for $649 and $749, respectively. This is where the problem arises.

According to Time Magazine, the iPhone 6 costs Apple a total of $200.10 to manufacture. The iPhone 6 Plus costs an extra $15.50 due to additional components, such as a larger display screen and more RAM. This places Apple’s profit margin on the phones at 69 percent for the 6, and 71 percent for the 6 Plus. A profit margin this large raises red flags for the average consumers like you and me.

Making a profit is a simple concept, you merely need revenue to be greater than cost. It is absurd, however, to charge consumers a price 50 percent greater than the cost it takes to make the product. In a struggling economy, the amount of cash Apple is squeezing out of its customers is shameful.

It is no secret that Apple has climbed it’s way to the top of the market and is considered a company known for their “luxury goods.” They are well aware of the current demand for their products, which I believe is the reason they are abusing their status. Until the consumer refuses to meet Apple’s listed price, they will continue to demand more and more money as new generations of their products are released. We, as consumers, need to refuse to buy Apple’s products until a change in price is made. This should start with a refusal to purchase the newest iPhone 6 and 6 Plus. Once this step is taken, Apple will be forced to lower their price.

The exorbitant price for the iPhone 6 and 6 Plus is well beyond something I can comfortably afford. If a stand were taken to send a message to Apple that their goods need to be cheaper, Apple would be forced to lower their costs. This would not only shift the power of pricing to the consumer but also have the potential to re-brand Apple as a company for the consumer. If they took this step, the hit that their luxury branding might take could potentially be replaced by a more powerful reputation as a company for the people. More iPhones would be sold, and it is possible that the current profit they create from iPhone sales would be reached or even exceeded. A lower price makes the desired, and in some cases necessary, devices in closer reach to the average person then what they are currently. This move would benefit both producer and consumer.

Similar to many of you, I fell victim to Apple and the game they’re playing with consumers. With the previously suggested method to get Apple to decrease the price of the newest iPhone 6 and iPhone 6 Plus, I feel that the company and those who buy it’s goods would find a more mutually beneficial relationship. Taking a stand against a corporation as large as Apple would not only make a strong economic statement, it would create better prices for you and me the next time we look to buy the next best thing in technology.

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    DeeD0mFeb 22, 2016 at 7:40 am

    I’ve never bought an Apple phone or table and I’m hardly missing out on anything. Phone’s a phone and their all pretty much alike today. Only a sucker pays more for something when there’s a cheaper alternative. Apple like to gouge. It’s not like everyone doesn’t know this.

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Apple gouging its customers with absurd prices