Why Apple Isn’t A Luxury Brand
By: Jonathan Kim
Tags: Apple, iPad, iPhone, Apple Silicon, Luxury

Why Apple Isn’t A Luxury Brand

They just have luxury options

The absurd $15,000 Caviar “Sands of Time” iPhone 12 Pros

For a long time, Apple was considered a “luxury” brand, with both the positive and negative connotations that entails. But with an apparent shift in philosophy expressed through the introduction of some new midrange products, as well as the gains from Apple switching Macs away from Intel to their own Apple Silicon chips, I think it’s time for that “luxury” designation to end.

When thinking of the more complimentary aspects of the word “luxury”, Apple products have long fit the bill. Luxury items often are made with premium materials like leather, silk, and gold — in Apple’s case, think metal and glass instead of plastic. Luxury items are often high-quality and reflect a craftsmanship, thoughtfulness, and attention to detail. At a luxury store, you expect top-notch customer service from helpful, knowledgeable, and accommodating employees. Luxury products are often not just easier to use, but a joy to use. And yes, all of these extra features and details often lead to higher prices that put them out of reach for people with more modest budgets. Still, there’s a reason why the adage “you get what you pay for” still endures.

But it’s the negative connotations of “luxury” that critics of Apple have long used to insult both Apple products and the people who buy them. For example, there’s the perception that luxury items are for people obsessed with brand recognition and the status it confers on their owners. Apple detractors have long maintained that AirPods and the latest iPhones are only status symbols for people who want others to see them rocking the newest and most pricey baubles. For fans of Windows PCs, Mac computers are overpriced when it comes to computing power, catering to users who prefer style over substance. Luxury items are for people who don’t understand the true meaning of value — after all, a canvas bag from Target will hold your belongings just as well and at a fraction of the price as a Louis Vuitton one, and a Bentley won’t get you to the grocery store and back much better than a used Ford Fiesta will. And despite the premium charged for an iPhone, a much cheaper Android phone will still run apps like Instagram, Facebook, Fortnite, TikTok, and virtually anything else that’s considered indispensable to the smartphone experience.

In light of this, is Apple’s designation as a “luxury” company a compliment, a backhanded slight, or a condemnation? And more importantly, does is it relate at all to the Apple we know today?

Committing to the Midrange

The 4th generation iPad Air

The past few years have seen Apple make a welcome shift to offering new midrange products aimed at more price-conscious consumers who want something better than the base models but don’t need or want to pay for all of the higher-end “pro” features. For a long time, and still today, Apple’s solution to selling lower-priced devices has been to continue carrying older models of products like the iPhone for roughly $100 less. After the iPhone 12 models were released in October 2020, Apple’s current iPhone lineup looks like this, with a model for nearly any price point:

But in 2016, Apple started to switch up that philosophy with the release of the 1st generation iPhone SE. Even though Apple had made the move to larger phones with bigger screens with the iPhone 6 in 2014, the SE retained the smaller case and four-inch screen of the iPhone 5S while being powered by the same A9 system-on-chip as the just-released iPhone 6S. With this SoC and an improved camera, the SE could now shoot 4K video, take Live Photos, and had always-on “Hey Siri” support — all features the 5S didn’t have — for $250 less than the 6S. Apple would continue this strategy with the iPhone SE 2 in 2020, reusing the case for the 2017 iPhone 8 and adding the newest A13 SoC from the iPhone 11 lineup, which enabled features not previously found on the iPhone 8 like Smart HDR and Portrait mode on both the front and back cameras.

But in 2019, Apple employed a somewhat opposite strategy with the 3rd generation iPad Air. Instead of taking an older case and adding newer features, the iPad Air 3 was essentially the 2017 iPad Pro with a more modern SoC and a handful of “pro” features removed to bring the price down while retaining some newer features that Apple felt would be appreciated by average users. Gone was the more advanced camera, ProMotion high refresh rate, and the speakers were reduced from four to two. But the new Air still had the Pro’s laminated 10.5” display, keyboard connector, TrueTone ambient light sensor, and compatibility with the Apple Pencil. The 2020 iPad Air 4 continued this trend, retaining the edge-to-edge display, USB-C port, and compatibility with the Magic Keyboard and 2nd generation Apple Pencil found in the 2018 iPad Pro, while losing the Pro’s ultrawide camera, Face ID, ProMotion, and quad speakers. The Apple Watch SE continued the iPad Air strategy in 2020, using a newer case and larger screen while lowering the price by removing features like the always-on display, ECG, and blood oxygen sensor.

Of course, none of this means that Apple has abandoned its high-end devices. A totally maxed-out 12.9” iPad Pro with cellular costs $1,649, and an iPhone 12 Pro Max with 512GB of storage will run you $1,399. But what’s most important is that these are just the most expensive options on a scale of potential prices. The iPhone SE starts at $399, and the base level 8th generation iPad starts at $329, with both considered to be among the best deals in tech. And while the most expensive Hermès Stainless Steel Apple Watch 6 with Single Tour Deployment Buckle will run you $1,499, you can also buy a Series 3 Apple Watch with most of the same features for just $199. Apple sells luxury options for many of their product lines, but those product lines also have very competitive models at the low and midranges as well.

So to call Apple a “luxury” company tells only one third of the story. Go try to buy the “cheapest” Rolls Royce or the most inexpensive Rolex and you’ll see how a true luxury brand operates.

Apple Silicon Creates Value

But what about the Mac? Haven’t Mac computers always been significantly more expensive than comparable Windows PCs? Yes, and it’s certainly a fair argument as far as specs are concerned, though I’d argue that the design, build quality, security, and unique operating system of Macs justifies their higher price. But it’s definitely true — for a long time, it’s been possible to buy PCs with more RAM, storage, and the same or better Intel processors than comparably priced Macs. Notably, it took a long time before Apple offered a lower-priced entry-level Mac in the form of the Mac mini, though that was hardly a complete computer since it lacked a screen, keyboard, and mouse. And if you wanted a Mac laptop and weren’t a student, the cheapest one you could buy was a MacBook Air — arguably without enough storage or RAM — for $1,000.

But with Apple moving away from Intel in 2020 and using their own Apple Silicon processors, the whole value proposition of Macs vs. Windows PCs has been turned on its head. Reviews and benchmarks have confirmed that this first round of low-powered M1 Macs provides not only way more computing power than similarly priced Windows PCs, but also outdoes Intel Macs and PCs costing hundreds and sometimes over a thousand dollars more, while also providing vastly improved power efficiency that translates to a huge jump in battery life for laptops. While it’s true that the M1-powered Macs aren’t priced lower than previous Intel models, their headroom in both computing power and battery life means that they will remain fast and capable for many more years than the Macs they’re replacing, as well as virtually all Windows PCs. While Macs will probably never be the budget choice, it now seems undeniable that Macs with Apple Silicon will be leading the industry for years in dollar-for-dollar value when it comes to performance and longevity.

It’s hard to consider something a “luxury” product if it outperforms and outlasts competitors costing as much or more — just as a product isn’t a true bargain if it only works well for a short time before crapping out. As we know, price and value are often not the same thing, and a higher price doesn’t always mean that you’re being ripped off — sometimes you actually get what you pay for. I find it hard to argue that something costs too much if it’s something you use every day that works as advertised for a reasonable amount of time.

This thinking may trace back to a conversation I had with my older brother when I was a little kid. I had an Aiwa portable cassette player (yes, I’m old) that I absolutely loved (it had Mega Bass!) and used almost every day. But one day, after about three years of use, the sound coming out of it became warbly and unlistenable. When I told my brother about it and how upset I was that it no longer worked, he asked me how much I had paid for it (about $30) and how long I had been using it (three years). “That means it cost you $10 per year to use it,” he said. “If someone offered to rent you that cassette player for $10 a year, would you say that was a good deal?” I said that would be a very good deal.

“Then I guess you got your money’s worth,” he said.

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