Boston, MA 04/24/2014 (wallstreetpr) – The analysts were of view; to increase sales Apple Inc. (NASDAQ:AAPL) must decrease its product prices. On another hand analyst were also afraid by lowering the price of their iPhones the margins of the company will take a hit. Even without lower their price AAPL outsold the other smart phone makers. A cheaper iPhone would have reduce the experience of first time user, it would have eaten the sales of other iPhones, eating into margins of the company .
What would have happened if AAPL would have launched a cheaper model of iPhone in the market is anybody’s guess. AAPL earned more profit and margins by not introducing cheap iPhones. It is estimated that AAPL nearly took 87% of global industry profit in winter quarter;
By doing so, Apple Inc. (NASDAQ:AAPL) had more cash in hand for buy sophisticated OS and chips, which in turn give a better device experience.
AAPL with the extra cash in hand is going to increase their office space by four time of the present office space and open many new retail chain for the customer touch and feel experience of their devices.
To make phones with high quality a company needs to invest in technology, talent and production capacity. If AAPL would have decreased their price of iPhones, the next product which comes out for their product line will not give you the same experience. In the past, AAPL has been outsold a number of times by the big boys, but it is now outselling those companies and also protecting its margins in doing so.
Luxury and affordability at same time:
The technology which AAPL provides to its customer is robust, dependable and of course affordable. AAPL launched sleek looking iPad for $500 in around 2010; at that time Samsung was selling a crude version of heavy, slow and bulk tablet for $780. Other technology companies also tried doing so, but were unsuccessful.
AAPL came with smart phones in around 2007 and price it high. That time Microsoft Corporation (NASDAQ:MSFT) mocked at the pricing of Apple Inc. (NASDAQ:AAPL); but few years down the line AAPL not only exceeded in selling more smart phones than Microsoft Corporation (NASDAQ:MSFT) or it licensees.