Can Apple Be As Luxurious As Louis Vuitton?
In mid-April, Apple announced a new, seemingly unremarkable product: wheels. These wheels were designed as an accessory for Apple’s new desktop computer, the Mac Pro, and cost $700. At first, this price seems absurd -- why would anyone buy computer wheels for $700?
Perhaps the wheels’ high price can be explained by their quality. Indeed, Apple’s wheels are made of solid stainless steel, can turn 360 degrees in every direction, and come with dual-sided, independently-moving rubber treads.
Additionally, the Wheels Kit includes a stainless steel, rubberized hex key for installing the wheels on the Mac Pro. But these wheels, for all of their high-quality materials and polished fit and finish, are still $300 more expensive than Apple’s newest iPhone SE ($400) -- a device that contains a camera, battery, speakers, and of course a multitude of microchips and processors.
Clearly, the material and production cost of these wheels cannot justify their price.
Alternatively, perhaps the functionality that the wheels give to the Mac Pro can justify their cost, considering the Mac Pro weighs about 39.7 pounds. The Mac Pro, however, is a desktop computer, so it has to be plugged in to function and is not inherently designed to be a mobile piece of equipment.
Additionally, these wheels lack what is arguably one of the most essential components of any computer wheel: locks. It seems, then, that this additional “mobile” functionality does not justify the wheels’ extraordinary price tag.
So why did Apple make these Mac Pro wheels, knowing that their price would deter many of the already few owners of the Mac Pro -- a machine that starts at already $6,000 for the base model? The answer: to maintain their status as a luxury producer of technology.
Similar to that of Louis Vuitton and Gucci, Apple’s reputation and brand evoke luxury and quality. It is this brand that makes Apple’s tech products so highly sought after and allows them to price their products -- which are usually similar to those of their competitors -- at much higher prices.
However, this reputation is hard to maintain; the market drives every tech company to produce their best product and make as much money as possible. Apple knows this, and consequently prices some of their products extremely competitively: the $400 iPhone SE and the $329 iPad. But on the other end of the spectrum, Apple needs to maintain their status as the luxury producer of tech products.
Louis Vuitton recently released a set of two 3KG dumbbells for $2,860. Much like Apple, Louis Vuitton has made a product that is neither unique nor particularly valuable in terms of added functionality. What is unique about these dumbbells is that they are made by Louis Vuitton, an esteemed company known for its status of luxury, high quality, and innovation.
Like Apple’s Mac Pro wheels, these high-priced dumbbells allow Louis Vuitton to maintain their brand of luxury and “high-end” goods, and can thus price their wallets, bags, and clothes for higher amounts than their competitors.
In one study performed at the University of Texas at Arlington, when two identical products are placed side by side, with one product being more expensive than the other, consumers typically assume that the more expensive product is “better” than the less expensive product. Thus, by marketing a set of wheels for $700, Apple is able to promote the notion that their brand stands for luxury and high quality.
Additionally, Apple’s wheels have garnered a significant amount of media attention. While some articles have characterized Apple as “foolish” for thinking that consumers may buy these wheels, most have pointed out how many other Apple products are cheaper, such as the iPhone SE, and thus provide Apple with free advertising.
Lastly, this strategy of releasing relatively overpriced products is not new. When Apple first released the Apple Watch in 2015, they also made the gold-plated Apple Watch Edition, which they priced at $17,000. Even last year, Apple announced that a new stand for their computer monitor would cost $999.
Clearly, Apple knows what they are doing, and these wheels are just another way that Apple can maintain their reputation of luxury, innovation, and dominance in the world of all things tech.
Written by Rohan Mehta, Edited by Alexandar Ristic, Alexander Fleiss & Thomas Braun
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