After iPhone success, Apple looks at pushing prices of computing devices up

So Apple’s strategy, of hedging against a dip in volume by pushing up the average selling price of its products, is clearly working, at least when it comes to the iPhone. Now, Apple seems confident of replicating the same strategy with its latest MacBook Air, iPad Pro, and Mac Mini.

Take the case of the new MacBook Air for instance. The new model has been improved on many fronts and now features a Retina display, butterfly-style keyboard and force touch trackpad. While this would have warranted a price hike, in India the jump is almost Rs 60,000 for the new MacBook Air which will now sell at Rs 1,14,900. That’s because the previous generation MacBook Air can be purchased for as low as Rs 55,000 on e-commerce sites such as Amazon and Flipkart, even if Apple has a higher box price.

Also read: Apple MacBook Air 2018 first impressions: A classic redefined

The iPad Pro, which was launched in 2015 with a limited appeal, has seen its price up. The iPad Pro 11-inch starts at Rs 71,900, while the 12.9-inch model comes in at Rs 89,900. In comparison, the older 10.5-inch iPad Pro is priced at Rs 49,999 and the 12.9-inch model has a starting price of Rs 65,900. And in case of the Mac Mini, the company’s small sized desktop computer, the new base price of Rs 75,900 for the 128 GB SSD, 3.6 GHz quad-core i3 and 8GB RAM model is a jump of almost Rs 21,000 in comparison to the Rs 49,900 base price of the 2014 model. The accessories too cost more now.

Also read: Apple’s future: The iPad Pro is more powerful, MacBook Air becomes more mobile

While Apple devices have always cost a little more than the competition, they are gradually becoming more expensive. But if there’s a tech company out there that can persuade users to pay more for its products, it’s Apple. Apple seems to have found its magic sauce: the realisation that its customers are willing to pay more and not put off by pricing. In fact, the higher price tag could even be a pull for some of them.

In the case of the much-improved MacBook Air, the company will be offering the new product as a better, and more expensive, choice. Those who don’t want the high-resolution 13.3-inch Retina Display, Touch ID fingerprint scanner, an improved keyboard, and Force touch trackpad can settle for the older model which is still a very capable machine. “Many had thought that the new MacBook Air would come at $1000… but it costs $1199. That being said, I think the new MacBook Air will be a very successful product,” says Tom Mainelli, Program Vice President Devices and AR/VR at International Data Corporation (IDC). Apple too seems to be hoping so.

“They [Apple] have sold a lot of MacBook Airs, even though the existing product is quite old, having an old design and internals. So with the new one, you are getting a much better display and faster performance,” he said.

Apple wants to establish the iPad as the next computing platform powered by iOS. CEO Tim Cook subtly touched on this point when he announced outsold every PC manufacturer’s notebook sales. “This makes iPad not only the most popular tablet, but the most popular computer in the world,” Cook explained in his keynote earlier this week.

In the case of the much-improved MacBook Air, the company will be offering the new product as a better, and more expensive, choice. (Express Photo by Anuj Bhatia)

Also read: Apple iPad Pro (2018) first impressions: Taking the Pro to professionals

Mainelli says Apple is making a strong argument that the iPad is, as Tim Cook likes to say, a computer for more people. “From the performance perspective it’s a very powerful device, the screen continues to get better, the 12.9-inch model now feels like the 10.5 in hand and the all-new Pencil. From the hardware perspective, you can make a strong argument that the iPad Pro is a good business device.” These creative professionals and enterprise users are the ones who will buy the iPad Pro for work, especially now since desktop-grade software like Adobe Photoshop is coming to the devices. This also makes it logical to price it well above the regular iPad, which can be purchased at $329. Mainelli thinks Apple is playing a long game with the iPad Pro.

The Mac Mini, the company’s small sized desktop computer, has the new base price of Rs 75,900. (Express Photo by Anuj Bhatia)

The Apple of 2018 is a very different company. The $1 trillion tech titan has understood how to keep Wall Street happy each quarter. Apple knows that the smartphone and PC markets are no more growing and the only way to grow is by pushing the prices and margins as volumes fall.