Andrew O'Hara
Apple COO Jeff Williams delivered a brief speech at at Elon University where he touched on a variety of topics including the rising cost of the company's products and inaccuracy of analyst cost estimates.
The short speech took place Friday, February 22 at Elon University where he talked about Apple's incredible growth since he joined two decades ago.During a question and answer session following the speech, Williams was asked by a student regarding Apple's plans to lower product prices. The student also cited a recent report that claims an iPhone only costs $350 to manufacture.
"The stories that come out about the cost of our products [have been] the bane of my existence from the beginning of time, including our early days," said Williams. "Analysts don't really understand the cost of what we do and how much care we put into making our products."
The Times News, who covered the speech, describes the lengths Apple has gone to for its product development. Citing the Apple Watch as an example, instead of just mimicking fitness trackers that existed prior to Apple's wearable, the company built an entire physiology lab with 40 licensed nurses and enlisted the help of 10,000 participants to further study how calories are burned in various fitness exercises.
Williams did admit he understands the concern of Apple's rising price points — which has been especially noticeable on the iPhone models that now can sell for well over $1000.
"It's something we're very aware of," Williams said. "We do not want to be an elitist company. That's not — we want to be an egalitarian company, and we've got a lot of work going on in developing markets."
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85 Comments
It’s always the same story. Our puny minds can’t comprehend the expenses Apple has. Well, every company has expenses that are not materials cost. Is that really the customer’s burden to bear? I think what customers want is for some of that past R&D to start to amortize, and result in stable product lines. This unpredictable continuous rise in prices for no compelling reason has everyone concerned.
Meanwhile, our puny minds can comprehend the balance sheet, and profit is obscene. The same old story doesn’t fly.
Dont get get me wrong I think it’s perfectly fine for Apple to have a wide line of iPhone, but they’ve pushed the envelope on what a flagship model can cost and they’re not doing anything they weren’t doing 5 years ago when a flagship iPhone was $650.
Obviously Apple is a premium brand. You cant say no to that. I am glad that Apple exists as a premium brand in the tech field.They have little to no competition on the high end. People in the states & in Europe can easily afford Apple products. I just hope in the poorer regions of the world like India, Africa & South America Apple pushes the iPhone 6S,7 & iPad 10'. Those products are good enough for most people. Plus, if idiots actually looked at the profit margins they have remained between 36-39% for the last 5-7 years. So , no ,they are not making more money on average. Maybe on certain storage tiers, yes. But not overall.
The problem with his response comes from being so far removed from the average consumer which Apple originally reached to appeal to in order to get to the place they are today. As others have commented, research and development is always going to be a factor for any company and it is incorporated as such in their balance sheets and amortized over a number of years to reach maximum benefit. There is nothing wrong with Apple creating a premium line either. Apple needs to make two lines - one that is affordable for average consumers and the other for professionals. I could see a line of non pro Apple products that should range from $500 to $1000 for computers/laptops and $400 to $800 for mobile phones, tablets, and wearables.