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How Long Will Apple be Able to Maintain its Pricing Power

While the average terminal price of the rest of the competitors has gone from $ 246 to $ 162, a reduction of 34% in price that is expected to happen in a competitive sector, Apple has achieved that the average price of the iPhone pass $ 629 to $ 766, an increase in price of 22%.

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At the time of analyzing Apple, the graphic that we enclose is pure gold and it leads us to the million dollar question about the apple company.

apple pricing power

Obviously we do not have the answer but we must bear in mind that we are dealing with a completely paranormal phenomenon that I do not remember ever having seen in a sector of massive consumption as competitive and changing as that of the manufacturers of mobile telephony terminals or computers.

We are not talking about just one advantage in technological innovation, something that Apple stopped having some years ago.

Look at the graph on the left where we can see the evolution of the average price of an iPhone since 2012 and the rest of competitors.

While the average terminal price of the rest of the competitors has gone from $ 246 to $ 162, a reduction of 34% in price that is expected to happen in a competitive sector, Apple has achieved that the average price of the iPhone pass $ 629 to $ 766, an increase in price of 22%.

The result is that at this time, the iPhone has a price premium over the rest of the market of 374%. Something that we could understand if it will be a niche product, something that is not the case of the iPhone, of which more than 100 million units are sold per year.

Perhaps for this reason the price of Apple’s stock is so sensitive to possible reductions in the price of the iPhone. Analysts and investors try to anticipate when the “principle power” of Apple will end, a phenomenon that challenges everything seen in the business world.

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