What’s the most drool worthy or lust worthy Mac this year? How about the iMac Pro? $4,999 gets you an 8-core Intel Xeon Inside, 32GB of RAM, 1TB SSD storage, 8GB of GPU, and that big 27-inch Retina 5k display.
What’s not to like? $4,999?
Actually, that’s cheap. In 1984 dollars. An original Mac, priced at $2,495 in 1984– complete with black and white display, few apps, and a floppy disk drive– would be priced at $6,150 in 2018 dollars. That’s according to the Bureau of Labor Statistics online CPI Inflation Calculator (and you know they can’t put it on the internet unless it’s true).
What that means should be obvious. Computers have increased in capability while prices for that capability have decreased.
Apple’s iPhone changed that trend. How so?
iPhone is an example of what I call the tech gadget price paradox. Instead of a slowly dropping price tag each year, combined with ever increasing capabilities– compare an original Mac, circa 198, with an iMac Pro, circa 2018 for fewer dollars than the original; adjusted for inflation– we see iPhones with ever increasing capabilities for ever increasing price tags.
The original iPhone was expensive, relative to 2007 smartphones, at $499 for 4GB of storage. The display was 3.5-inches (considered huge back in the day). Since then, Apple has managed not to follow the technology gadget pricing trends of the past 40 years, where hardware improves in capability, and prices go down.
New iPhone models today start at $749– substantially more than the original price tag, but substantially improved in every other category; hardware and software.
Microsoft sells the Surface Go PC notebook tablet hybrid for $499 (sans detachable keyboard). Yes, by today’s standard PC notebooks the price is low and capabilities somewhat anemic, but compared against past PC notebooks for a similar price, Microsoft’s entry-level noteoobk is a relatively competent, capable device.
A year after the iPhone was launched, Apple launched the incredibly thin and light and seemingly overpriced MacBook Air. How much? $1,799 got you a less than HD display, an actual 80GB hard disk, one USB port, and typical accouterments of the era (Wi-Fi, audio connector, etc).
Today, a MacBook Air starts at $1,199. You get a new generation Intel Inside, 8GB RAM, 128GB SSD storage, and a Retina display. Far more capable than the original in 2008, yet priced far less.
So, why are entry-level iPhones priced 50-percent higher than the original? Should not such technology gadgets all into the same trends from the original Mac to the Surface Go to the MacBook Air?
Yet, Apple has managed to raise prices while improving the iPhone’s capabilities– better camera, more storage, faster CPU, better graphics, far more built-in applications.
Sheeple? iSheep? Or, is Apple just very good at the balancing act of pricing what the market will bear vs. a customer base willing to pay the piper?