Monday, October 24, 2011

Apple's winning strategy: Lower prices


In the past, Apple had always been seen as a company selling niche, high-quality products at high prices. In recent years, however, it's captured business by keeping costs more competitive.

The company's lower price strategy applies not just to itsiPhone and iPad products, but also to the MacBook Air--all have been able to meet or beat the prices offered by some of its rivals, according to an analysis in yesterday's New York Times. But Apple also keeps its own internal costs down by locking in prices on huge amounts of hardware components through multi-year deals with manufacturers.

Looking at the iPhone 4S, Apple sells the entry level 16 gigabyte model for $199. That price comes in lower than some of the popular Android handsets, such as Motorola's Droid Bionic ($299 through Verizon Wireless), though as CNET's review points out, the cost drops to $199 if you shell out $50 for a data plan.

The Times also noted that the Samsung Galaxy S II sells through T-Mobile for $230, though it's available through AT&T for $199, while the HTC Amaze 4G costs $260 through T-Mobile, but it can also be had from such retailers at Amazon for $199.


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