The death of the Apple tax

The old adage says there are only two certainties in this world: death and taxes. Steve Jobs proved that not even the Reality Distortion Field is strong enough to resist the reaper. However, the company he spawned and subsequently resurrected seems to be doing away with the tax that came to be associated with its products. This so-called "Apple tax" refers to the price premium that used to be attached to each and every new product to roll out of Cupertino. These days, though, Apple’s highest-profile offerings tend to be pretty competitive on price.

Take the new iPad, for example. With a Retina display that quadruples the pixel density of its predecessor, many expected the third-gen tablet to cost a little bit more than the iPad 2, but Apple’s latest creation arrived at the same $499 price, knocking the old model down to $399. After all those years spent hyping the thinness of its products, perhaps Apple simply wasn’t prepared to ask more for a fatter tablet, regardless of the resolution.

Whatever the rationale, the fact is both iPads offer pretty good value. The new model has the best screen on any mobile device, plus better graphics performance than Nvidia’s Tegra 3 SoC for the same starting price as the Transformer Prime, our favorite Tegra tablet. The Prime offers more storage and other perks, but that’s wading into details. Asus was expected to charge closer to $600 for the high-DPI Transformer Infinity Series, whose 1920×1200 display has fewer pixels than the iPad’s Retina panel.

Right now, the 16GB iPad 2 may be the best tablet deal around. The $100 price cut brings the least expensive iPad down to $399, where it’ll end up going toe-to-toe with Asus’ next budget 10-incher, the Transformer Pad 300. Samsung’s last-gen Galaxy Tab 10.1 has been discounted, too, but only to $439—and it’s still without an official Ice Cream Sandwich update.

The Apple tax never really applied to tablets. After all, the iPad debuted at $499, a much lower price than many had expected, yours truly included. Perhaps Jobs learned his lesson with the first iPhone, whose price was slashed by 33% just two months after the initial launch at an exorbitant $599. (That was for the 8GB version, by the way; the 4GB model debuted at $499 but was discontinued two months later.) We haven’t seen a new iPhone priced that high since. If I were to renew my cellular contract today, the iPhone 4S would cost about the same as the latest and greatest Android handset. The older iPhone models are basically free on contract.

To be fair, Macs remain relatively expensive compared to their PC counterparts. The gap is shrinking as PC makers chase ultra-slim designs to gain Intel’s ultrabook seal of approval, though. Apple proved that a market does exist for high-end computers, and it seems everyone wants a piece.

Although they share similar lines and live in a walled garden adjacent to the one that contains iPads and iPhones, Macs are a very different breed. Those iDevices are much closer to consumer electronics products: there are fewer models and configuration options, the underlying hardware is simpler than what you’ll find inside a notebook, and more of the component parts bear Apple’s name. Those attributes, combined with the organizational influence of former COO (and now CEO) Tim Cook, have allowed Apple to continue reaping huge profits while doing away with lofty premiums. Cook reduced inventory levels and traded in-house fabrication for contract manufacturing. At the same time, he used Apple’s massive cash stockpile to lock up supply of vital components like flash memory. We’ve heard that Apple is flexing its monetary muscle to fund entire factories dedicated to producing Retina displays—and that its carefully worded manufacturing contracts make it difficult for competitors to secure supply of high-DPI screens.

Part of me cringes at the thought that Apple might be actively trying to lock its competitors out of certain technologies, either by buying up all the available production capacity or keeping its suppliers from working with anyone else. But my bachelor’s degree comes from UBC’s Sauder School of Business, so part of me appreciates Cook’s shrewdness, even if it has a ruthless undercurrent. That’s probably that same part of me that was fond of the Machiavelli readings in my political philosophy elective.

Let’s not forget Apple also has a formidable marketing machine that remains integral to the appeal of its products. Apple does a great job of convincing consumers they want the latest iDevices; the cheaper those products are, the less magical they need to be in order to get folks to whip out their credit cards. Had the iPad and iPhone maintained Apple’s history of premium prices, I don’t think either would be nearly as popular today. Whatever has been lost on markup has surely been returned several times over on volume. Remember, too, that these devices are tightly integrated with iTunes and the App Store, which contribute a healthy cut of each transaction. No wonder Apple’s sitting on a cash stockpile that totals nearly $100 billion.

Even back when it was a vendor of high-priced Macs with relatively little market share, Apple had a disproportionately heavy influence on the PC industry. Now, thanks to a lineup of reasonably priced smartphones and tablets, it owns a huge chunk of the market for devices that make up an increasingly important part of the modern personal computing experience. That’s kind of a big deal if you’re at all interested in the direction of computer technology.

Now, you may not agree with the locked-down nature of iOS; the lack of built-in SD slots, USB ports, and HDMI outputs; the high cost of accessories; or the general smugness exuded by all too many Apple fanboys. I don’t. However, I did encourage my girlfriend to get an iPhone 4S over the alternatives, and I have found myself recommending the new and second-gen iPads to others on more than one occasion in the past couple of weeks. Apple may not be earning my dollar, but these days, it’s certainly asking for fewer of everyone else’s.

Comments closed
    • rjseo
    • 8 years ago
    • merryjohn
    • 8 years ago
    • Rageypoo
    • 8 years ago

    The funny thing out of all of this, the property, and tax, is all “paid” for with federal notes, issued by banks, that have zero value at all. We are slaves.

      • demani
      • 8 years ago

      I don’t know- value is subjective to begin with. And then you could look at it like this: we pay for real goods with notes that have zero value- who is getting the worse end of this deal?

    • End User
    • 8 years ago

    I’m happy with Apple’s pricing on their iPad/iPod/Apple TV lineups.

    A quick look on Rogers.com and I see that a 16GB 4S is $50 more than a 16GB S II to buy outright. The 16GB 4S is $159 on contract and the SII is $99 on contract. Haters will argue that is a tax. I’d say that the better phone costs more. 🙂

    Is the Thunderbolt Display worth $999? Tough call. I think it is. I bought one and it is great – on a Thunderbolt equipped Mac. That being said it is sitting next to a U2711 (Linux rig) that I waited ages to buy just to save $300 during a Dell sale.

    Laptops? I think the MacBook Airs should drop by $100. The MacBook Pro lineup needs an immediate refresh as it is stale and overpriced.

    Mac mini? $100 less

    Mac Pro? When it was new I think it was competitive on price. That no longer seems to be the case. You can snag a Dell Xeon workstation with dual 6 core Xeon’s for over a grand less if you wait for a sale. The Mac Pro is in desperate need of a design, CPU and price refresh.

    iMac? Looking at the 27″ for $1,699 one could say that it comes with a 27″ display (worth $700 or $1000 depending on your point of view). Is the form factor and spec worth $1,000/$700? I think so. HP sells a 27″ 1080p system for $1,400 and 27″ 1080p displays are priced @ $300-$400.

    Memory and storage? You have got to be out of your fracking mind to buy memory and storage from Apple. That is an Apple tax!

      • sweatshopking
      • 8 years ago

      pretty accurate, actually.

      • demani
      • 8 years ago

      [quote<]Memory and storage? You have got to be out of your fracking mind to buy memory and storage from Apple. That is an Apple tax![/quote<] But Apple, Dell, and HP and all the rest have the same ridiculous pricing on RAM and HDs (particularly HDs these days). That's not an Apple tax- that's a Sucker's Tax!

        • TakinYourPoints
        • 8 years ago

        Yeah, everybody marks up like crazy, it’s why you buy from Crucial/Kingston/Corsair/etc

          • NeelyCam
          • 8 years ago

          No – that’s why you buy G.Skill from Newegg.

      • Corrado
      • 8 years ago

      Don’t forget the added convenience of walk in retail support thats included in the base price, and the ‘idea’ that OS X is a superior OS. Whether you think it is or not is irrelevant, most people that use it feel that it is and is worth $100 more, especially since upgrades are no $29 vs the Windows upgrades that cost at LEAST $100.

      And before anyone argues that Apple OS releases are service packs, I point to Vista -> Win 7 and say that the releases of OS X contain at least as many changes.

    • Alexko
    • 8 years ago

    “the initial launch at an exorbitant $599 […] We haven’t seen a new iPhone priced that high since.”

    We haven’t? Here’s what can be found on Apple’s website: (http://store.apple.com/us/browse/home/shop_iphone/family/iphone/iphone4s)

    Or get iPhone unlocked and contract-free:
    16GB: $649.00
    32GB: $749.00
    64GB: $849.00

    Of course if you conveniently ignore that you also have to buy an expensive contract, then the prices are $199, $299 and $399. But why would you?

    Seriously, if $850 is not a ridiculous amount of money for a phone, I don’t know what is.

      • TakinYourPoints
      • 8 years ago

      That amount for a high end smartphone is normal. A 16GB Galaxy S II without contract costs $600, an HTC Sensation will run $700, the new Droid RAZR costs $750, the list goes on. Before the days of current good smartphones you’d see unlocked Palm Treos run over $600. In 2005 Nokia had a normal dumbphone constructed from aluminum and glass that cost $500 [i<]with[/i<] contract. Singling out the iPhone for unsubsidized prices is ridiculous, contracts are a standard way that every cell manufacturer offsets the price onto the carrier.

        • Alexko
        • 8 years ago

        That’s not really the point. Discussing subsidized prices is pointless without specifying the total cost of the contract. But yes, high-end smartphones are crazy expensive. The iPhone just seems to take the cake—unless there are even more expensive models I’m not aware of.

          • TakinYourPoints
          • 8 years ago

          I listed several unsubsidized phones that cost as much as or more than the iPhone. That was with only a few seconds of searching, I’m sure there are others as well.

          The bottom line is that singling out the iPhone for being discounted with a contract is strange, that’s how it works with [i<]all[/i<] smartphones. As for the cheaper $200 smartphones you buy without contract, they are usually $50 to free with a contract. The same logic with subsidies apply the further down the line you go. Perhaps the cost of a subscription should be mentioned as well, but then again call and data plans are the same among most smartphones anyway, and who gets a smartphone without voice and data plans?

            • Alexko
            • 8 years ago

            The ones you listed were cheaper than the $850 64GB iPhone, but never mind that, maybe there are more expensive ones. People who don’t work for a phone manufacturer’s marketing department shouldn’t quote subsidized prices, because they’re meaningless. There are plenty of carriers across all countries that sell those phones, with different contracts at different prices, and different subsidies.

            It’s usually a giant black box that doesn’t let you know how much you’re spending on voice and data versus how much you’re spending on subsidizing your own phone.

            In fact, the term “subsidies” isn’t very appropriate, as carriers aren’t paying for the phones, consumers are, just in 6 to 24 installments.

            So quoting subsidized prices and calling them cheap merely propagates the completely false notion that these are the real prices you’re paying. Here (France) carriers offer contracts with unlimited voice and unlimited data (with limited bandwidth after 3GB) for €20 (about $26.6) per month, based on a “bring your own phone” model, i.e. without any subsidies. With AT&T’s iPhone contracts starting at $60/month, this should give you some idea of just how silly and irrelevant subsidized prices are.

            • TakinYourPoints
            • 8 years ago

            [quote<]The ones you listed were cheaper than the $850 64GB iPhone[/quote<] But they were all 16GB phones. Compare those prices with the 16GB iPhone.

        • DragonDaddyBear
        • 8 years ago

        I don’t know about you, but I think their off-contract price is a little high. If they can make the new iPad and sell it for $500, why can’t they sell their phones cheaper? People could upgrade to every new iPhone if they did that.

          • TakinYourPoints
          • 8 years ago

          Another important detail is that carriers (not customers) are willing to buy smartphones at a higher price. They take these prices because they offset it with contracts. If people want to buy them without contract, they have to bear the brunt of the same wholesale prices that carriers can justify.

          Smaller/miniaturized devices cost more in general, which is why smartphones and tablets from anyone (not just Apple) have the smartphones costing more. What the carriers are willing to pay helps keep prices where they are even further.

          • madmilk
          • 8 years ago

          No, Apple has to maintain its profits by extracting the money from the carrier, from which most of their sales are derived anyways. If they sold the iPhone for $500 unlocked to regular people, what price would they have to offer AT&T? $400? That’s not too healthy to maintain “most valuable company in the world status” once you consider how much an iPhone costs to develop and manufacture.

      • demani
      • 8 years ago

      This is the fallacy of including the contract price: I will have a phone no matter what, so the contract/subsidized price IS the price, regardless of whether I get an Android, WinMo or iOS device. Making the decision for a data plan is only an additional expense when calculated against a voice-only plan, and the voice component is only a decision when calculated against no plan at all. I know very few (as in none) smartphone users for whom no cell phone at all is an option, and most don’t consider the data to be an option (it isn’t for me).

      The choice for most people is not “Do I get a cell phone and plan or use nothing?” which is what your argument is, it’s “Do I get an Android for $49 or an iPhone 4 for $99?”- where that $50 [i<]is the only difference in price that matters [/i<]. [quote<]Of course if you conveniently ignore that you also have to buy an expensive contract, then the prices are $199, $299 and $399. But why would you?[/quote<] Well, because the monthly cost is the same, because there is no incentive NOT to have a contract since I don't anticipate moving in the next two years (and even then, if that causes an issue, then there are ways to break a contract without incurring the cancellation fee). Given the U.S. situation there isn't much reason NOT to sign up for a contract. So the question is "why wouldn't you?"

        • TakinYourPoints
        • 8 years ago

        [quote<]This is the fallacy of including the contract price: I will have a phone no matter what, so the contract/subsidized price IS the price, regardless of whether I get an Android, WinMo or iOS device.[/quote<] [i<]Exactly.[/i<] Unless you're on a no-contract dumbphone and aren't using a data plan, arguing about the non-contract price is ridiculous since you're using a phone with a data plan and contract either way. High end Android phones cost roughly the same as an iPhone without contract, anywhere from $600 to $800 for one with 16GB of storage. To single out Apple for the cost of a no-contract phone is ridiculous given the fact that comparable devices all cost about the same.

    • TEAMSWITCHER
    • 8 years ago

    The biggest misconception of Apple’s pricing is that a Mac has more resale value. When I sold my last MacBook Pro, I got $500.00 for it. That’s considerably more than I would have gotten from a similar Dell, Acer, Toshiba, or HP. Also Windows Ultimate is the only Microsoft product that is feature competitive with OS X. Windows Ultimate upgrades can add another 80.00 or more to the cost of a PC. I firmly believe that (for me) the total cost of ownership (Mac or PC) is the same.

    • kc77
    • 8 years ago

    Apple makes money on every device it sells and the Apple tax is alive and well on just about everything. It made the most with iPods. But it makes a ton on even their full fledged computer devices. Hell those probably have the highest margins.

    Take the Mac Book Pro. The 13″ model is 1199 bucks and has Intel Graphics with a Core i5. A Dell Inspiron 17 will give you for the same price (actually 50 bucks cheaper) a Core i7 with Nvidia graphics, a larger display, and larger hard drive.

    Just because Apple held the line on the iPad 3 doesn’t mean the Apple Tax is gone… far from it.

      • Rakhmaninov3
      • 8 years ago

      Well the build quality makes up for the inferior tech at the same price point. The sweet screens and trackpads help make it worth it, also.

      Mac Pro desktops have top notch build quality also but this matters less on a desktop and hardly makes up for the low-rent components you get.

        • kc77
        • 8 years ago

        The build quality? Back in the day this was true. However, that’s just not the case now and with regards to reliability they are no better, and sometimes times worse.

        Sweet Screens? What exactly is so sweet about a $1200 laptop with a 13″ screen? Those aren’t IPS they are in fact TN panels (perfect for an “artist”..no?….with a max resolution of 1280 X 800).

        Here’s a [url=http://store.sony.com/webapp/wcs/stores/servlet/SYCTOProcess?catalogId=10551&storeId=10151&langId=-1&LBomId=8198552921666383164&categoryId=8198552921644768015<]Sony Viao[/url<] with a 15" IPS screen (1080p), better hard drive, better CPU, onboard 6630, and bigger hard drive. It also has higher reliability. The cost? $1099 There's not enough brushed aluminium in the world to justify that cost difference.

          • TakinYourPoints
          • 8 years ago

          Build quality is better than the majority of laptops out there, certainly. It has the best trackpad out there, global multitouch gestures that go with it, one of the best keyboards out there, as well as the great balance between chassis size/weight, battery life, and performance. As for display quality here’s a comprehensive comparison: [url<]http://www.anandtech.com/show/5113/apple-15inch-macbook-pro-late-2011-review/3[/url<] I will say that the 13" MBP presents a very poor value at the moment, possibly the worst in Apple's entire laptop lineup. The MBA is thinner, lighter, has a better display, and has SSD storage (huge boost in performance), all for about the same cost. Really good deal on that Sony though. The majority of VAIOs even make Macs look like bargains, especially once you get to the ultraslims.

      • PrecambrianRabbit
      • 8 years ago

      Reasonable point, although really the better comparison is to the 13/14″ Inspirons that are about half the price. Still, I’d willingly pay an extra $600 for the Apple touchpad. (To be fair, I haven’t used an Inspiron since 2006. My most recent PC touchpad experience is my ThinkPad 510, which annoys me every time I touch it.)

    • Welch
    • 8 years ago

    They added a few things onto the iPad3 (display, camera, ect) compared to the iPad2 and charged the same $499.99 they did before, how is this removing the apple tax? Sorry Geoff but the title of your post is a stretch from the truth.

      • Dissonance
      • 8 years ago

      As TFA states, once you get past the title, the very fact that the new iPad is selling for $500 is an example of the lack of Apple tax. That’s a heckuva deal when you consider the tablet competition and the fact that the 1920×1200 Transformer Infinity Series was expected to cost closer to $600.

    • WaltC
    • 8 years ago

    Don’t you just hate worn-out cliches–you know, the kind that are as old as the hills and twice as dusty? Cliches like “apple tax,” and “Microsoft tax,” and “cell-phone tax” and prophylactic tax, etc., ad nauseum, ad infinitum?

    With all the meaningless hoopla about “Apple tax” and ” Apple market cap” (a plasticine term that is as helpful with calculating a disparity between Apple asset & liabilities columns as is the price of my worn-out sneakers and shredded shoe-laces)–but a term dear to the hearts of utterly warped RDF adherents the world over–I wonder why anyone bothers discussing tangibles anymore as market myths seem of much greater interest these days. Whatever floats your boat–trips your trigger, etc.

    Get this–I consider myself fairly “in the know” as general technological things go–I mean I can operate a cell phone with the best of them, build several varieties of computer from the ground up with off-the-shelf components and install all manner of both useless and useful Operating Systems to glue everything together into a hodge-podge that makes sense. Somehow. These are fun and useful skills to hone and develop. I can “network” when the mood strikes, and “cloud” is an ancient term though I’m still waiting to receive blessed relevance from on high through SotA (that’s “Sot-A” for my fellow Freudians.) Clouds are not new, novel, or existential. Clouds are old–though not necessarily rancid–technological throwbacks whose time has both come and gone already. But if you don’t know a “cloud” aside from a symptom of the weather then you are likely to extol the virtues of technological clouds while understanding their essence no better than Apple market caps. That’s not bad–it just makes you “hip” and thus hopelessly antiquated & irredeemably irrelevant. (Like Bill Mahyer with no tongue and/or without a line-item spell check.)

    But there is absolutely *nothing*–and I wish to emphasize this in the harshest, most dogmatically Imperial We possible, *nothing*– that Apple (formerly “Apple Computer” of Cupertino before the big ID crisis of the ’90’s left the company reeling and scared of its own shadow)–there is nothing that Apple makes that I want, that I need, that I cannot live without and that is Worth Having. When I think of Apple, as indeed I have thought about Apple for the last several lackluster, confused, morbid, hysterical, and rhetorical TWENTY YEARS, what comes to mind? Cell Phones? Nah, Apple surely didn’t invent them. And RIM was fire-dancing with “smartphones” before Apple coined the phrase “i” & the Kitchen Sink. MP3 players? Bar-r-r-r-r-f me with a spoon…;) Macs? Puh-lease…Progress will come only when Apple starts selling Macs as “OS X PCs” that just so happen to also boot Windows natively…;) Until that happens, Macs are as competitive with Windows PCs in the international markets as are Chia Pets with radioactive hair follicles.

    iPads–1,2s, and now 1’s again. Macs should be filling in the yawning abyss in Apple’s product line with products–not batteries! Apple is selling much bigger batteries these days but with larger, and hotter screens to cover them up. What? Apple truly believes the masses are gullible and unwashed? That they won’t notice the difference and that they’ve been had? These are portable devices, remember–Apple has trouble remembering this, it seems–so Apple thinks that a bigger screen with < 1/2 the battery life is superior to a smaller screen with 2x the battery life? ID Crisis 112–yet again–Is it a desktop, is it a lap top? Only Apple knows for sure. Which is a crying shame. The new iPad ought to make the difference spell out UNMISTAKABLY TWICE THE BATTERY LIFE as opposed to 1/2 the battery life & 2x the heat.

    From where I’m sitting–if you allow your frontal lobes to be assaulted by an Apple purchase of any kind (Final Cut Pro is like the notion that Rembrandt greatly preferred charcoals, water colors, and crayons to oils and brushes) then a central lobotomy is to be your highest achievement at the apex of your Apple career. After all, who can really argue with half a brain? The idea is cruel and tactless–monstrous, even–and just the kind of nostalgic hyperbole that Apple transforms each and every day into dollars and sense.

      • sweatshopking
      • 8 years ago

      i read it all.

        • squeeb
        • 8 years ago

        same.

        • khands
        • 8 years ago

        I didn’t.

      • TakinYourPoints
      • 8 years ago

      Another waste of space post by WaltC.

      Brevity is the soul of wit. You clearly have none.

        • sweatshopking
        • 8 years ago

        why you gotta be a dick about it? you can’t handle the mouse wheel?

          • TakinYourPoints
          • 8 years ago

          A collapse post button would be much appreciated. If it was occasional then I could ignore it, but consistently ignorant/idiotic posts that take up so much space get old pretty quickly.

            • TREE
            • 8 years ago

            [quote<]consistently ignorant/idiotic posts[/quote<] In your opinion, maybe, but not in mine. WaltC doesn't often post comments on TR, but when he does he likes to write a little more than the average person, and I for one like to read his posts, whether I agree with it or not. The guy wasn't horrible to you, so don't be horrible to him. But alas, a collapse button would be nice for 50+ character posts.

            • TakinYourPoints
            • 8 years ago

            Fair enough. His posts are always terrible, take up a full browser page, and he never ever gets the point. It isn’t just here but also on other forums as well, it sucks. Being able to collapse his posts would be great.

        • AssBall
        • 8 years ago

        Your posts are some of the most consistently useless on the site. Call the Kettle back much?

          • TakinYourPoints
          • 8 years ago

          I make concise posts backed up by reputable citations, reports, and hard benchmarks. WaltC writes walls-of-text backed up by emotion, bias, and personal rhetoric. He is basically a more verbose version of the usual poor arguments you see made on the internet.

          A collapse post button would be great.

      • Bensam123
      • 8 years ago

      Too many descriptors ruin your ability to make a point.

      I’m sure there are those that appreciate your rhetoric to such great lengths though.

    • bender
    • 8 years ago

    Erm…not to state the obvious here, but any company sitting on ~100b in cash (with such a loss as to what to do with it that they’re bringing back dividends?!) obviously hasn’t done away with any sort insane markup/’tax’ in their products. I think it’s just a little less obvious now that they own the entire stack.

    Now Apple can tax everyone: developers, app purchasers, song purchasers/writers, hardware purchasers…etc. That is, both sides…much like a government: income taxes and sales taxes.

    I’m really not gonna argue for any publicly traded corp, as they, by definition, have one master, but at least Google, Microsoft, etc… don’t own the entire stack yet. I’m not commenting on the quality of their product, just that they aren’t even close to being the monopolists that Apple has become. With your business degree, certainly you understand the distortions that monopoly produces.

      • torquer
      • 8 years ago

      Dividends are extremely commonplace. The fact that Apple hasn’t used them in years is more odd than their decision to start offering them again. Stock buybacks are also very commonplace. They know the share value is high and that they have a lot of employees with options that will dilute the market if they decide to exercise en masse at a high price. These are VERY normal actions for a company with a very high stock price. There is nothing unusual about it and it only gets attention because it is Apple doing it.

      I would like to see where the monopoly lies With Apple. You could say that they have a monopoly on the personal music player market, but that market is slowly disappearing with the ubiquity of smartphones and tablets. They have nothing close to a monopoly on smartphones. They do have a majority of the tablet market currently, but even Amazon has about 16% share of the market after only being in it for 6 months.

      This is the free market – Apple is successful due to shrewd business practices and high customer demand. If customer tastes change, so will the fate of Apple. Apple hasn’t always been the most valuable company in America and it won’t always be that way. Emotional and personal feelings won’t change that – the market will.

        • bender
        • 8 years ago

        Dividends being ‘extremely common’ for other companies does not make them something that Apple has done in the past 15 years. Apple was pushed to do so purely by the scrutiny currently being applied to them.

        As for monopoly…Apple itself has created this monopoly by intentionally creating a divide between Mac and PC (for instance). Think bicycle and tricycle. Both very similar things ostensibly, but when you think about it, they are not interchangeable at all. No one looking for one would consider the other. Therefor, despite their very similar appearance, a company could hold a monopoly (and distort the market) on tricycles while competition was healthy in the bicycle market.

        Obviously there is some overlap between the two products, but Apple itself has gone to great lengths (including creating a store which they alone control) to make PCs and Macs to separate products. Again, competition is (arguably) alive in the PC division, and completely, unarguably monopolistic as far as the Mac/Apple products go.

        Again…great business! Who would deny that? But they control things exactly like a monopoly does, and they offer a product that NO ONE ELSE can produce. I don’t give a flying whatever about the product, and I will never deny the general quality level of Apple products, but they do exercise monopolistic practices.

          • EtherealN
          • 8 years ago

          I’m pretty much the antithesis of an Apple fanboy (I loathe them 😛 ), but…

          “As for monopoly…Apple itself has created this monopoly by intentionally creating a divide between Mac and PC (for instance). Think bicycle and tricycle. Both very similar things ostensibly, but when you think about it, they are not interchangeable at all.”

          …what? “Intentionally creating a divide” through switching to the same architectures that PC’s use? Making it easy for you to dualboot a competing operating system? The only way to get your bicycle/tricycle analogy to work is if the bicycle is Windows, and the tricycle is OSX. And well, yeah, Apple has a “monopoly” on OSX. So what? (Though it deserves to be mentioned that there’s a tonne of independent retailers that stock it…)

          Regarding creating stores that they alone control – you mean like Google’s Market? (Well, “Play Shop” as it’s called now for whatever reason.) Or Valve getting publishers to mandate the use of their platform? Or EA setting up a store they alone control and mandating this for their key titles?

          Monopolistic practices – well, possibly so with regard to some parts of the supply chains, but fact is they get stuff out. Other companies can make quality screens for tablets – if they have the technology. If Apple places enough orders to saturate what is at present a limited supply, well, what do you want Apple to do? Artificially limit their production such that it’s way lower than demand? (And would you complain about the exorbitant prices that would then follow when supply/demand is thusly skewed?)

          I really don’t like Apple, but your reasons are not part of the reasons. My beef with Apple is all in their operating systems, though with the computers I can always run Windows or Linux or BSD or DOS if I want to… And in the case of windows, Apple has even prepared a dualboot solution for me. 🙂

            • bender
            • 8 years ago

            Appreciate the comments, but you’re missing a couple points:

            1) Apple switched to Intel, not to enable dual booting or be more consumer-friendly, they did it because they were using a lame duck architecture. The Power PC architecture, while beautiful and exotic to geeks, could not compete with x86. Apple, as it always does, switched to get the very best hardware.

            2) Apple, and I may be wrong about this, does not allow anyone else to open a markey for iOS apps. There are several options for Android, as well as actually distributing APK files via email, website, etc… The Play Market is very nice and convenient, but absolutely no jail-breaking (as mandated by Google, perhaps different for carrier-locked devices) is required to ‘side load’ an app on an Android device.

            3) You’re omitting the fact that Apple owns the entire stack. No other company has nearly as much control over the stack as Apple. As I said earlier, they tax both producers and consumers in their ecosystem, while being big enough to bully content producers and hardware manufacturers. They also will not allow anyone else to compete in their market. You think you can set up an alternative app store for iOS devices? That is a monopoly.

            I’m not denying that other companies have enjoyed…eh, similar positions in the past, though no one anywhere near to this degree, but we have certainly sought anti-trust remedies against e.g. Microsoft in the past. I’m saying that if Microsoft was open to these accusations then the modern Apple company is in a similar position.

          • torquer
          • 8 years ago

          I just have a real problem whenever consumers cry foul because their brand of choice isn’t the top dog. There may be a semi-fine line between shrewd and anti-competitive business practices, but there is a line nonetheless.

          I personally am a fan of Microsoft and I love Windows. I would LOVE for Windows Phone to be more popular than it is, but Microsoft didn’t anticipate the market like Apple did, so they aren’t top dog.

          Sony had the market cornered on consoles for 2 generations then blew it with the PS3 in several key areas. I like Sony, and I loved my prior Playstations, but I’m not calling foul on MS or Nintendo for doing better in the console market than Sony.

          Businesses make mistakes – you win some and you lose some. And yes, some engage in nefarious activities. But we in the tech community seem all too happy to cry conspiracy and foul every time some company/brand we don’t like does well or dominates a given market segment, and thats just ridiculous.

    • indeego
    • 8 years ago

    Just wanted to commend Geoff or the photographer on that apple picture. I like it. Thanks!

    • Voldenuit
    • 8 years ago

    There’s still an Apple tax. However, Apple having a monopoly on content delivery means that they are able to spread some of it onto the developers and publishers instead of the user. For instance, the App Store takes 30% of revenue for apps sold through the App Store, whereas Google takes 0%* of Android Market sales. They are also big enough that they can negotiate with content providers with clout (in some ways, to the benefit of consumers, such as forcing big music to offer DRM-free tracks, but the potential for abuse has to be monitored).

    * While Google takes 0%, carriers still take 30% of Android Market sales; I’m not sure if AT&T and Sprint take a percentage of App Store sales.

    Apple is in a much stronger position than the monopoly that Microsoft was envisioned to be in the 90s, as it has near complete control of the entire chain, from hardware design (in the case of iOS devices) to manufacturing to OS, software development and publishing, content delivery and distribution channel.

      • demani
      • 8 years ago

      [quote<]For instance, the App Store takes 30% of revenue for apps sold through the App Store, whereas Google takes 0%* of Android Market sales. [/quote<] Oh really: [url<]http://support.google.com/googleplay/android-developer/bin/answer.py?hl=en&answer=112622[/url<] Facts…who needs 'em?

        • cynan
        • 8 years ago

        What facts were ignored in the OP? The OP never said Google didn’t [i<]charge[/i<] 30%, he implied that Google didn't keep the 30% for themselves. While I personally don't know if this is different from what Apple does, I don't see how your post refutes that.

        • Voldenuit
        • 8 years ago

        That 30% goes to carriers. [url=http://android-developers.blogspot.com/2008/10/android-market-now-available-for-users.html<]According to Google, they don't take a percentage[/url<] other than the initial $25 fee: [quote<]Starting in early Q1, developers will also be able to distribute paid apps in addition to free apps. Developers will get 70% of the revenue from each purchase; the remaining amount goes to carriers and billing settlement fees—Google does not take a percentage.[/quote<]

          • demani
          • 8 years ago

          I stand corrected. But one question on that: if 30% goes to carriers, then where does that go when wifi only tablet owners make purchases? Surely they can’t give that to the processors.

          It also seems odd that carriers were getting even more money- they sell you the data service (for downloading the apps), so why do they get a cut of the app sales? (My guess is that was part of Google’s deal to get them to carry Android phones). Do carriers just get a flat split of all Android Market sales? Seems like a hell of a deal, and would explain the fervor for them to push Android- they make extra money they don’t get from Apple, Microsoft, or RIM (AFAIK).

            • Voldenuit
            • 8 years ago

            You’re right that it sounds like the carriers are double-dipping. And I wouldn’t be surprised if the carriers charged the billers for “privilege” of carrier-branded wifi devices using the Market. But I will admit I don’t know the details.

            I do remember hearing that at the sales level, the floor staff were getting $15 commissions on WP7 phones. No doubt similar schemes exist for some (if not all) other handset makers.

      • windwalker
      • 8 years ago

      Apple makes no money on content distribution.
      All of their content stores are designed to break even and turn a small profit.
      Apple built them to make the products they actually sell more attractive, and they have clearly succeeded to do so.

      • Beelzebubba9
      • 8 years ago

      [quote=”Voldenuit”<] Apple is in a much stronger position than the monopoly that Microsoft was envisioned to be in the 90s, as it has near complete control of the entire chain, from hardware design (in the case of iOS devices) to manufacturing to OS, software development and publishing, content delivery and distribution channel. [/quote<] I really have to disagree with you here. Apple does not have, nor ever will have, the market share Microsoft currently enjoys in the PC market, let alone at their peak in the 90s. Secondly, the areas where Apple is most dominant (tablets, MP3 players) do not have the same kind of vendor lock in that the PC software market has. Jobs fought with the content creation industry (and eventually won) to get DRM removed from iTunes tracks reducing the vendor lock in to almost nothing there and Apple supports booting competitor's OSs on their computers, something Microsoft has never spent money to support. Aside from these points, a number of successful anti-trust lawsuits were leveled against Microsoft and the same cannot be said of Apple.

    • kamikaziechameleon
    • 8 years ago

    Products that are price competitive are: Ipad 3, Macbook air, Ipod classic, I phone, and the apple TV(only since the last update when it actually became functional).

    Products that are WAY too much, I mac, Mac Towers, mac mini, The new Mac Books, every other i-pod IMHO.

      • TakinYourPoints
      • 8 years ago

      iMacs are also price competitive, especially the 27″ model given that fact that over half the price of it is the display. You’d pay anywhere from $900 to $1400 for the same 27″ IPS monitor from Dell, HP, NEC, etc.

      Mac Pros are not price competitive because all of the money is going towards Xeons, ECC RAM, and server grade motherboards. These are things that benefit an extremely small subset of professional users. I wouldn’t recommend anyone get a comparably specced/priced Dell Precision workstation either.

      The Mac Mini is also something I can’t recommend. Once you’ve added a 1080p IPS display, keyboard, and mouse, you have something that costs the same or more than a 21″ iMac except with slower internal specs and much less internal storage, plus you have a much larger overall footprint on your desktop. The iMac takes up far less space in comparison. Unless you have it plugged into a TV and are running Plex or something like that, eh, not worth it.

      As for Macbook Pros, a laptop with a great 16:10 display and fast hardware without compromising on chassis size or battery life costs money. The best-in-a-laptop trackpad and excellent keyboard are also huge. Fortunately the Macbook Air is a very price competitive option that gets you those things minus the discreet GPU, and a standard SSD to boot.

    • windwalker
    • 8 years ago

    Now that it’s obvious, even the resident Apple hater is starting to face reality.

    The so-called Apple tax was never an Apple tax, it was the avoid the evil Microsoft monopoly tax.
    Apple couldn’t afford to compete on price with the volumes of the monopolist and their lackeys.

    Just like for iPod, Apple’s domination in volumes for iPad allows them to be competitive on price.

    The smugness of Apple fanboys is justified by their rational preference for a better product.
    What’s your excuse?

      • Sahrin
      • 8 years ago

      [quote<]Just like for iPod, Apple's domination in volumes for iPad allows them to be competitive on price.[/quote<] iPods are not price competitive. Who told you that? They cost at least 50% more than superior competitors, and their monopolistic market position have driven superior competitors out of the market.

        • demani
        • 8 years ago

        Price competitive depends on your parameters: and what competitors are you referring to? Sandisk? Seriously, those are only superior for some people. Ask your grandmother to manage it and see what happens though-it doesn’t tend to be pretty.

          • windwalker
          • 8 years ago

          Why would he want his grandmother to be successful in using technology products?
          Then she might stop believing he’s a genius magician for being able to clean malware.

        • windwalker
        • 8 years ago

        Apple has no monopolistic position in any market.
        Any capable company could build a great portable music player or a great tablet and beat them.
        Music is sold without DRM so there isn’t any lock-in and the tablet market is at the very beginning.

        The vast majority of people have chosen iPods over competitors, so your opinion of which product is superior is not shared by the mass market.

      • Silus
      • 8 years ago

      LOL an Apple fanboy saying other companies use monopolistic tactics ? Oh the irony!!!!

        • demani
        • 8 years ago

        What monopoly does Apple have? Other than PMPs and tablets (one shrinking, the other still small) they don’t have the dominant market position in any field.

          • windwalker
          • 8 years ago

          Don’t bother them with facts, this is religion.

        • windwalker
        • 8 years ago

        LOL neckbeard saying people that value their time are fanboys.
        Oh the hilarity !!11one

      • kamikaziechameleon
      • 8 years ago

      Um, the apple tax may have started to melt away one product at a time in the last 3 years, doesn’t mean there never was one. Still some of their products are twice as expensive as they should be, see the mac pro tower, mac mini, etc.

        • windwalker
        • 8 years ago

        When their volumes for those products will be similar to the other big players, we can revisit this argument.
        For now, lower volumes and higher quality are a better justification for the higher prices.

        • Beelzebubba9
        • 8 years ago

        The Mac Pro is price competitive with other dual socket 1KW PSU powered workstation options from established vendors. The Mac Mini is a pretty poor value compared to cheap towers, but it’s not hideously overpriced for a SFF solution with a ULV CPU.

          • windwalker
          • 8 years ago

          Begone voice of reason, for your lips utter blasphemy.

      • windwalker
      • 8 years ago

      The large pile of down-votes is a testament that truth really stings.

        • theonespork
        • 8 years ago

        The large pile of down-votes is testament to the large pile of bullsh*t your original trollish comment amounted to.

        The willingness to openly advocate one form of corporate greed over another just because it is wrapped in a prettier package says a lot about the consumer in question, not the company that pimps the product. This entire idea that Apple is holier and more righteous than Microsoft, Google, Samsung, what-have-you is nonsense of the highest order. They are all companies exploiting their market position to wring dollars from their customers. Apple is not your friend, they are not coming to your slumber party, your LAN party, or your Scentsy party, and they will gladly stick their hand in your pocket while you are not looking just as willingly as every other corporation beholden to its investors on this earth.

        You are not special because you choose Apple. You are not smart because you choose Apple. You are not better because you choose Apple. You are the demographic Apple exploits through careful marketing, careful economic analysis, and careful brand conservation. It is highly probably, demographically speaking, they knew you were going to buy their product before you knew their product existed.

        In other words you are Apple sheep. Microsoft has their sheep. Google has their sheep. Samsung has their sheep. You are sheep. Your misplaced smugness is grating not because you are right, but because it once again reinforces the idea that more people are beholden to marketing and the “it” that makes them part of something bigger than themselves, than they are to rationality, thoughtfulness, and independent thinking. Thanks a lot, I love ending my Friday’s on a thud….

          • windwalker
          • 8 years ago

          Apple offers something no other company has ever offered: great products built with my needs as a user put first.

          That’s why they are the only company that makes laptops with quality 16:10 screens.
          That’s why they are the only company that sells mobile phones built for users and not for wireless carriers.
          That’s why Foxconn says Apple products are harder to build than other products.

          I am willing to pay more not just for the higher quality, but also to reward the only company that puts me first and hope other companies will wise up and start copying their values instead of poorly aping their products.

          Everyone else just makes whatever they can using the cheapest available components, is easy to build, satisfies most of their business partners and gets them the most reliable profit.
          In short, they are lazy.
          That’s because they know they can afford it.
          Because bottom feeders like yourself buy whatever is cheapest and put no value on quality.
          You make the world a worse place for the rest of us who do.

          I am special because I can recognize greatness and appreciate what is truly valuable.
          You have no chance of achieving greatness when you are incapable of recognizing it.

          Happy Friday!

            • theonespork
            • 8 years ago

            Off the med’s, off the rocker, off the farm…

            You actually said:

            “Apple offers something no other company has ever offered: great products built with my needs as a user put first.”

            That is hyperbole at its finest ladies and gentleman. No other manufacturer in the world has EVER offered great products built for the user first. F*ck off: Rolex, Bugatti, Armani, PRS Guitars, TI, H-D, Nintendo, Burger, Titleist, Boeing, S&W, Solovair, Serotta…hell, screw all of you other companies in the entire world cuz ya’all suck. Your just lucky Apple doesn’t blow it’s 100b taking over EVERY market for EVERY product in the world…but as soon as they are finished curing overpopulation (one dead Foxconn worker at a time) your time will come.

            Heh, you do hyperbole, I do sarcasm.

            • windwalker
            • 8 years ago

            It’s not hyperbole, it’s the truth.
            And it applies to the huge number of people that can’t afford a Rolex, Bugatti, Armani or Boeing (wtf?!) product.

            With the exception of Nintendo, I haven’t heard of the rest of the companies in that list.
            I don’t and have never owned any products from the companies you listed so I’ll make no judgement of their products or anyone using or praising them.
            How about you develop the common courtesy of doing the same for Apple and the people that enjoy using their products?

            Those dying Foxconn workers are quite annoyed now with the holier than thou ignoramuses that have forced Foxconn to promise it will cut their overtime.
            They aren’t too happy to learn they will have to wait longer to save enough cash to buy a car, house, get married, or that they will not be able to send as much money back to their much worse off family members.

            You do come off as a blowhard and do it very well.

            • theonespork
            • 8 years ago

            Now you accuse me of having no common courtesy?

            You come out swinging from the get-go with your fanboisms, then you make outlandish statements, and I counter them. Yes, that makes me a blowhard with no common courtesy. Of course. Thin skinned much?

            If you have EVER read any of my very few comments on this site, it would be easy to surmise that I do not make fun of Apple users in general, nor do I have a particular hatred for them as you wish to imply. I will always and without exception, however, be annoyed when a fanboi, be it for Apple or any other product, starts trolling with a holier than thou attitude such as yours.

            You found a product you really like and enjoy talking about? Great. You want to share that enthusiasm with others? Great. You become an acolyte denigrating other companies and their users at will, making proclamations of superiority because of the products you choose, and making insanely obtuse and outlandish statements…hold on their cowboy.

      • WillBach
      • 8 years ago

      That smugness you’re talking about only makes sense for Apple engineers. I use and enjoy Apple products, but I’m not smug about it. I save my smugness for things I make and do.

        • windwalker
        • 8 years ago

        Your decisions are some of the most important things you do, so you can freely feel smug about sound purchasing decisions.

      • Rakhmaninov3
      • 8 years ago

      Bitter much?

    • Silus
    • 8 years ago

    “Part of me cringes at the thought that Apple might be actively trying to lock its competitors out of certain technologies, either by buying up all the available production capacity or keeping its suppliers from working with anyone else.”

    You shouldn’t think about it and just accept it as the truth. That’s exactly what Apple does. They use their “weight” to threaten companies to do as they say and ignore everyone else, or they will not do business with them anymore.
    Some countries usually consider this monopolistic and anti-competitive, but “others” ignore it completely, maybe because Apple bribes high-ranking government figures ?

    As for the Apple tax, it’s still very much alive, just not in the markets where Apple has a higher market share than others, but also has much more competition. They know their fans are dumb and will believe in anything they say (throughRDFs), but it’s better to keep them at bay with more reasonable prices in these markets with more competition or they may suffer eventually.

      • demani
      • 8 years ago

      But to point out the obvious: they aren’t the only ones. Intel was doing that so companies wouldn’t use AMD, Microsoft was doing that so people wouldn’t run Linux, WalMart does it with most of its manufacturers, and most automakers have similar deals.

      As an argument for it (and just playing DA here) one could posit that by buying as much capacity as they need, they are locking in revenues for the manufacturers, resisting the downward pressure, and allowing the manufacturers to invest in the production lines knowing they have a solid source of income-one they wouldn’t if there were a bunch of smaller orders. Additionally, it’s not like Apple isn’t selling everything-so the market is working quite efficiently-one distributer for all those screens rather than having them shipped all over the place-that is streamlining and cost containment. That benefits everyone in the supply chain as there is less inefficiency (waste) and guaranteed revenues.

      And if Apple hadn’t pushed the market open, Motorola and Samsung might not ever have entered at all-further reducing choice, jobs, and economic activity. That rising tide raised all ships.

      Who among you wouldn’t take a fat guaranteed payday in lieu of a bunch of (hopeful) smaller ones?

        • Silus
        • 8 years ago

        I didn’t say others don’t do it. But those others had to pay HUGE fines for it. Where’s the HUGE fine for Apple ? Yeah…non-existent…

          • demani
          • 8 years ago

          If the others pursued predatory schemes in order to prevent competitors from entering or competing, then they were fined. But in all of the above cases, they had at least a [i<]majority[/i<] of the market they were working in. It would be hard to argue that Apple has a majority in anything but the two small markets I noted. They aren't even approaching a monopoly position in the cell phone industry (where a lot of the flash goes), and they certainly aren't even in a great position in the computer industry. And all of their most direct competitors are in all of the same areas, and many have higher revenues and could have pursued the same tactics to gain share. None did. Apple wasn't coming from a position of strength (i.e. having already dominated the market)-they did it from a newcomer position. Their strength was simply one of cash on hand. So maybe the reason there aren't any fines is that they haven't done anything that necessitates them (you know Samsung, Motorola, or MS via Nokia would be able to bankroll an investigation and get the DoJ on that if they wanted to, or felt there was something illegal going on). I'm not saying it's not ruthless, but if Apple is financing the development of those factories, they should be able to get some benefit from that.

            • cynan
            • 8 years ago

            Any contractual clause that artificially limits the sale of products (ie, LCD panels) to willing buyers is not good for free market economy and technological advancement in general. By its very nature it restricts new development, particularly among smaller companies. And It is primarily these smaller companies that anti-monopolistic laws are meant to protect.

            Just because Apple is exploiting the paucity of such legal protection where these products are made does not make these sorts of dealings a positive influence in these markets. And just because companies like Walmart get away with similar strong-arm tactics with some of their suppliers does not mean that there shouldn’t be laws in place to restrict this if there aren’t already.

            You do have a point that if Apple is financing the production of these OEM items it is only fair they get priority. That said, extortion is still extortion.

            • ltcommander.data
            • 8 years ago

            It all seems pretty grey. Apple not just signs long-term contracts to purchase components, they seem to pay for the construction of factories and purchase of equipment to make those components. Signing a contract preventing say Samsung for selling their general Hi-DPI display production to others would be anti-competitive, but what about building factories and buying equipment for Samsung to operate under terms that those factories and equipment only be used for Apple production? It would seem rather reasonable that Apple wouldn’t want the millions/billions of dollars they invested in production tools to be freely used by their competitors. Apple may be flush with cash, but their job isn’t to subsidize the entire tech industry.

    • DragonDaddyBear
    • 8 years ago

    I think the only Mac that has the Apple Tax is the MBP. The MBA is fairly competitive against simmilarly speced competititors, and the 27″ iMac is actually a great deal when you look at the cost of the computer and the (very good) display.

    I don’t think the Apple Tax is gone, though. It’s far more subtle. The “tax” is now keeping you in their eco system. Got a new iMac and want to use it as a display? Well, you better have a MBA or other Thunderbolt equiped device. Or how about streeming your video to your TV from you MBP or iPhone or iPad? Well, you need an Apple TV! Have MP3’s? Well, we’ll give you access to them any where any time… so long as you upload them into iTunes and use iTunes. Oh, while you are there, you might as well buy you new songs from us, too!

    It’s not that they are terribley expensive on their own, but as a sum it’s quite a bit of a hit on the already empty wallet. Their products work the best when you have more of them. That is the new “tax,” it’s not money but your lifestyle they want (to keep getting more money). I like my soul, but I’m having a harder time as each year passes keeping myself from giving it to Apple.

    • trackerben
    • 8 years ago

    I’m been holding off for so long… but at the risk of appearing a troll, I mean really, “tax”?

    Why the fixation on labelling Apple’s product pricing strategy as such? Taxes are fees coercively assessed, charged, and collected on artifacts of commerce by a government, a non-commercial entity which usually reserves to itself the authority to levy and police funds for meeting its expenses and obligations.

    I don’t see much wiggle room here for describing Apple’s marketplace behavior as taxation, even as educational allegory. No doubt, Apple is building a commanding position in consumer electronics, on the backs of China’s hard workers, by the smarts of its designers and executives, with the advantages of a supertooled culture and finances, for all the world’s computing consumers. But Apple is no government. It has no authority to command consumers to pay fees for merely participating in the markets it is in, it has no idea or use for assessment regimes. And obviously, it has no recourse to
    judiciary or police of its own to enforce such conceits.

    There is a lot of historical precedent for this sociobehavior. The most familiar which comes to mind were all those previous attempts to paint Microsoft as a Leviathan equal to the federal government in power and prestige, beyond its lawful reach. As commonly known now, these stories were mostly humorous by-products of a serious demarketing campaign brought about by Microsoft’s competitors to pre-empt its lobbying influence in imperial Washington. Laughable rhetoric now, viewed in the lens of history.

    Let’s not distort our view of the truth claims we hold about this world any more than we have to.

    Edit: For anyone who does not know a “tax” entails the forceful confiscation of private property to fund public governance, here’s a clue piece on the concept and practice at its most extreme – global burden-leveling, i.e. “shared sacrifice for the greater good”.

    [url<]http://news.investors.com/article/601205/201202141851/obama-budget-includes-tax-hikes-on-all.htm[/url<] Obama's Budget Raises Taxes On All, Not Just The Rich

      • paulWTAMU
      • 8 years ago

      What the crap rock did you come out from under? “Apple tax” is a long standing phrase I’ve heard used for years to denote the higher price for the specs that apple computers have had for the last…what, decade maybe? This isn’t something Geoff pulled out of his ass.

        • trackerben
        • 8 years ago

        I kept my piece since this is well-known slang. Geoff is not the first or the last here. But it’s not just common or coarse talk, it’s actually misleading language and the idea requires better terms. So maybe I’ve snapped and am not fit to shine your bling. But describing something with “Apple” and “Tax” does not allow it to be validly rephrased as “taxes by Apple”, or invoice amounts as “taxes of Apple”, or windfalls as “taxes from Apple”. This “Apple Tax” is such a turkey of a phrase, it is unlikely to fly into broader usage.

        As the phraseology leads to all kinds of falsities when it’s put into play, it begs for a reset. Why not refer to it more accurately as the “Apple Premium” or “Apple Fine”? At the very least I could then crack non-absurd jokes like “Apple is a fine company, you pay a fine for their product”. Less lame, more fame.

          • Meadows
          • 8 years ago

          Nope, “tax” sounds better.

            • trackerben
            • 8 years ago

            So you might be of the metaphor-minded type who views “Apple Tax” not as a descriptively useful reference but as a cool-sounding perjorative. Well enough, just don’t subject yourself to too much Metaphor Tax.

            • paulWTAMU
            • 8 years ago

            Why is tax pejorative?

            • trackerben
            • 8 years ago

            The object “Tax” itself is not a pejorative but a term for the what and how behind the forceful confiscation of private property to fund public governance. It’s from the context of entities subject to the negative financial implications of onerous taxes that pejorative qualifiers arise. Thus the phrases “a taxing procedure” or “a taxing woman” or “tax and spend” or “Apple tax”. I suppose one could try disparaging Apple as “a taxing company” but it’s too weird given the conventional wisdom which associates governments with taxation.

      • Arag0n
      • 8 years ago

      Just logged to answer your stupid comment, but what if apple achieves to lock most of mobile marketshare to iOS and their AppStore? Are you going to be ok with paying a 30% to apple for EVERY app that anyone wants to install in any phone or tablet? Isn’t that tax for you? sorry, but you are crazy man…

        • trackerben
        • 8 years ago

        No, I won’t like it, nor the precedent for the high margin they are setting in this industry. But saying so won’t convince anyone that Apple’s premium prices somehow represents the term “tax” in its base and most common definition as a levy – i.e a forceful confiscation of private property by authorities to fund public governance.

        Unless you think you can get away with fuzzily implying the following:
        Apple confiscates properties
        Apple is a public authority
        Apple has police powers
        Apple is a governance
        Apple can make demands of anyone it chooses

        I would stick with the less crazy terms “Apple Fine” or “Apple Penalty” than mess around with metaphors.

          • Joe Miller
          • 8 years ago

          You made very good points. However they do not argue with you on the meaning and sense. You know, even here people do not consider the other side’s arguments, so…

            • trackerben
            • 8 years ago

            Thank you. I tried, but couldn’t get through. The MetaForce is strong in this one.

            • Meadows
            • 8 years ago

            Because what you say is ridiculous. You must be Captain Literal or something.

            • trackerben
            • 8 years ago

            If so, then you must be a General Metaphor.

          • Meadows
          • 8 years ago

          Both “fine” and “penalty” imply that you’ve done [i<]something wrong[/i<]. Buying Apple products is not wrong. "Premium" would technically be right, but it's too many syllables to be comfortable. So, "tax" it is.

            • trackerben
            • 8 years ago

            The terms “Premium” or “Price” imply it with less burden. “Apple Tax” sounds sharp by popular standards but then so does “Apple Price” which also describes things better. I had thought a call to more literate ground would benefit discourse.

            • Meadows
            • 8 years ago

            Perhaps you are not familiar with the internet.

            • trackerben
            • 8 years ago

            Oh, I do know “the Internet”. It’s the place where I go to find premium “fine” words like Apple Tax.

          • BobbinThreadbare
          • 8 years ago

          You are aware that words can mean different things depending on context right?

          In fact, lets look up the definition right now, [url<]http://dictionary.reference.com/browse/tax[/url<] [quote<]1. a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc. 2.a burdensome charge, obligation, duty, or demand. [/quote<] Well look at that, it does in fact have a 2nd meaning that works perfectly well in this situation.

    • ImSpartacus
    • 8 years ago

    [quote<]With a Retina display that [b<]quadruples[/b<] the pixel density of its predecessor[/quote<] Are we measuring pixel density with ppi^2 or ppi? Ppi is the de facto industry standard for measuring pixel density, so that's probably what the Tech Report should use in its writing.

      • ImSpartacus
      • 8 years ago

      I’m embarrassed to say that this has problem has still not been corrected.

      If Mr. Gasior wants to throw out concern for the human eye’s peculiarities and use ppi^2 to measure pixel density, that’s rational, but I don’t think that’s what happened. I wonder if this mistake could’ve been avoided if Mr. Gasior looked into UBC’s engineering programs instead of their business school…

        • Dissonance
        • 8 years ago

        Funny you should mention that. I actually spent two years in UBC’s engineering program before burning out on math an the lack of electives. Thing is, I don’t think staying in the program would’ve gotten me over the semantic hurdle you’re stuck on. The new iPad quadruples the number of pixels in the same display area. Within the context of the post, I don’t see a big problem with that wording.

          • ImSpartacus
          • 8 years ago

          [url=https://en.wikipedia.org/wiki/Pixel_density<]Pixel Density[/url<] is a [url=https://en.wikipedia.org/wiki/Linear_density<]linear density[/url<] by convention. On occasion, I've seen it displayed as an [url=https://en.wikipedia.org/wiki/Area_density<]areal density[/url<] along with the linear density, but I've never seen an areal density stand alone. This is not semantic, this is about honestly stating the primary argument of your blog post. You are making a point about Apple's 'tax,' so you justify your point with the content of your blog post. That sentence is your first justification to convince readers of Apple's growing bang-for-buck ratio. For the flagship argument to be miscommunicated in an overzealous way is disingenuous for a respected journalist. And it's kinda funny. Even though I was a highfalutin math major, the difference between linear and areal density escaped me until I took a second year intro physics class with only about a hundred engineering students as company. Go figure. [quote<]The new iPad quadruples the number of pixels in the same display [u<][b<]area[/b<][/u<].[/quote<]

            • The Dark One
            • 8 years ago

            The wikipedia link you gave uses pixels per inch, not the [i<]number[/i<] of pixels a display has. It's still doubling!!!1

            • ImSpartacus
            • 8 years ago

            Hell yeah. The new iPad is a beacon in the dark land of 1366×768. I’m thrilled that Apple got such an incredible display into a $500 tablet in significant quantities.

            But we don’t need to over-exaggerate its impressive screen for it to be impressive.

    • kvndoom
    • 8 years ago

    You still pay an Apple tax because the devices aren’t upgradable. Soon as you find out 8/16/32GB isn’t enough storage, you can’t just buy an SD card to upgrade… nope, you have to replace the whole device.

      • derFunkenstein
      • 8 years ago

      Or, you know, delete that chiptune version of We Are the Champions from your playlist and don’t sync everything you own to the device.

        • kvndoom
        • 8 years ago

        Why not? Isn’t that the whole point, to be able to take stuff with you? I’d rather just dump everything on there once than go about some repeated add/remove cycle because I’m out of space. We are discussing [i<]convenience[/i<] devices after all.

          • derFunkenstein
          • 8 years ago

          I really don’t want everything on there. I should probably delete a lot of what I’ve ripped from CDs because I never listen to it, and I have purchased songs as parts of albums that I never want to listen to. I’m better off making a big playlist, letting iTunes re-encode everything as 128kbit on the fly (while not modifying my original Apple Lossless CD rips, Amazon MP3 store, or iTunes Plus purchases) and let the media take as little space as possible. If you want everything including stuff you don’t even like, then more power to you.

        • Silus
        • 8 years ago

        Yes…how dare the people to want to decide what they keep in the devices they bought…Shame on them! Apple decides what they do and there’s no more discussion!

          • derFunkenstein
          • 8 years ago

          If you just buy less capacity than you need, you kind of have it coming, doncha think?

            • Silus
            • 8 years ago

            I’ll retort with another question: when buying a product do you ignore upgrade-ability ? I sure don’t…

            But I’ll answer your question with the articles own premise, which is Apple tax. Apple charges an arm and a leg for the higher capacity models, when for any other phone that supports an additional SD card, that SD card can be obtained cheaply nowadays.

      • Silus
      • 8 years ago

      And the battery too. If it’s not in warranty you can’t even take it to the store for exchange.
      Plus the SIM that you can’t use on any other phone.

      It’s just amazing how some people “accept” these major shortcomings and STILL say an iPhone is better than anything else

        • adisor19
        • 8 years ago

        “Plus the SIM that you can’t use on any other phone.”

        lol what ?!

        There are other phones that use the microSIM format now. Apple was the first, and the rest are following.

        Adi

      • Tuanies
      • 8 years ago

      My Galaxy Nexus doesn’t have upgradeable memory and I’m “stuck” with 32GB. My previous DroidX had a 16GB micro SD card, it came with the phone and never left it. So for me, and I’m sure a lot of people, flash memory upgrades aren’t really a big deal.

      However, my Galaxy Nexus has this 3-pin pogo connector thats pretty useless because there are no peripherals that use it, whereas if I had an iPhone, I’d have thousands of car and home docks that used the dock connector.

    • Frenetic74
    • 8 years ago

    I’ve never understood why people love apple computers and OS so much. Expensive hardware and I absolutely hate the OS. The OS is like ‘computing for dummies’ and it’s frustrating as hell to navigate. I build my own PC’s so maybe that has something to do with it.

    Anyway, iPod classic and iPhones are a different story though. I own both and like them well enough. No iPad…can’t find any real use for it. I like simplicity in mobile devices. I think it belongs there moreso than a home pc or laptop.

    Whatever the Apple tax is they’ve sold me into not paying it a long time ago.

      • Flatland_Spider
      • 8 years ago

      Some people like to customize their OS more then others, and the limited options of OS X are frustrating.

      I like running Linux more then OS X simply because it has all of the disadvantages with none of the lockin. If I’m going to be inconvenienced, I might as well be by system I can tweak.

    • Left_SHifted
    • 8 years ago

    I think the article clues in to Apple’s strategy, they are trading absolute price margins for iOS marketshare, and its actually quite clever from Apple, banking on appstore sales to make up the fat margins that they are used to having on their “traditional” Mac hardware.

    Infact, it seems like with the Mac appstore they are trying to move in the same direction with the Mac products(obviously diluted somewhat by allowing third party apps to co-exist in the Mac OSX ).

    Here’s hoping we see a similar pricing strategy employed to increase Mac marketshare by leveraging lower prices with higher appstore sales.

      • TakinYourPoints
      • 8 years ago

      Except that it doesn’t work that way. iTunes and the App Store are far and away the least profitable parts of Apple’s business. For years it has operated at just above break even. The reason it exists is to hook people into a very profitable hardware ecosystem. The iOS devices you claim are giving up margins for marketshare actually carry the fattest profit margins of all Apple products, literally double that of the Mac.

      The iPhone by itself makes more gross revenue and net profit than Windows and Microsoft Office combined. The iPad is more on top of that. The App Store makes peanuts, but it is valuable in that it provides huge incentive for people to get iOS devices. Having far more developers and higher quality applications than any other mobile platform out there are huge incentives for people to buy an iPhone or iPad.

      Don’t count on the App Store to make up for dropping prices on Mac hardware, it won’t ever make enough money for that to be a logical step.

        • Krogoth
        • 8 years ago

        *-citation needed

          • TakinYourPoints
          • 8 years ago

          [url<]http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/[/url<] The iPhone and iPad have the highest profit margins of any product line they sell, even higher than the Mac. iTunes and the App Store by comparison have closer to 10% profit margins, and it makes sense given that almost everything goes towards the RIAA, movie studios, publishers, developers, and the cost of running the service. They add value and utility to the hardware, but the hardware is where the actual money is made, not the media or applications. As for the iPhone making more than Windows and Office, here you go: [url<]http://articles.businessinsider.com/2012-02-04/tech/31023911_1_steve-ballmer-iphone-microsoft-ceo[/url<] iTunes and the App Store bring in peanuts compared to what Apple's hardware does, both in gross revenue and net profit.

            • Bananaman
            • 8 years ago

            I applaud you, sir. Reputable citations, intelligent insight, that’s how all these posts would be in an ideal world.

            • TakinYourPoints
            • 8 years ago

            Thanks very much

            • TakinYourPoints
            • 8 years ago

            It is annoying how so much argument on the internet avoids facts and benchmarks and leans so hard on preconceptions, opinion, and personal bias. It shouldn’t be about transforming preconception into a point through mental gymnastics, it should be about looking at the facts and then coming to a conclusion based on that.

    • Krogoth
    • 8 years ago

    Apple Tax is well and alive.

    You still see it in their desktop, laptop line.

    iPads and other Apple gadgets are “loss leaders”*. Which means that Apple intentionally sales that on a competitive price to help encourage marketshare and convince new customers to look into their other products.

    *-iPad and other gadget aren’t being sold at a loss, but Apple purposely reduces their “infamous” tax on them.

      • derFunkenstein
      • 8 years ago

      A cursory viewing of TFA suggests that Geoff already accounted for that.

      • Decelerate
      • 8 years ago

      I disagree about the loss leader part of your comment. The iPhone, iPad and Macbook Air have the greatest margins.

        • demani
        • 8 years ago

        Again, logic can be so pesky when there is a good rant going.

        On the ultraportable side Apple is in the ballpark (and not the highest priced company either).

        And the other models are selling ok for now, and I bet we will see hiDPI screens in the new iMacs and MacBook Pros before too long, which will help justify their continued higher-than-average pricing.

        The Mac Pros are where it really sucks-maybe the Ivy refresh (if it happens) will bring a redesign, or some other price shift.

        But as far as iDevices go, Apple is perfectly in line with the market.

      • End User
      • 8 years ago

      [quote<]iPads and other Apple gadgets are "loss leaders"*.[/quote<] Hardly. iPhone margins are roughly 50% and iPad margins are roughly 20%. iPhone revenue alone was more than Microsoft's in the past quarter.

      • TakinYourPoints
      • 8 years ago

      iPhones and iPad are among the highest margin products they sell. Macbook Airs and iMacs are extremely price competitive with PC ultraslims and all-in-ones, often bringing better specs and better displays/physical components for the same price or less.

        • Krogoth
        • 8 years ago

        I find that claim dubious at best, unless you can provide some concrete proof.

        It is more probable that iPhones and iPads make their revenue through sheer volume.

          • TakinYourPoints
          • 8 years ago

          [url<]http://tech.fortune.cnn.com/2010/03/02/what-doth-it-profit-an-iphone/[/url<] iPhones and iPads have higher profit margins than anything else they sell.

    • Johnny5
    • 8 years ago

    Now that I think about it, I do seem to dislike Apple less than I used to, though I couldn’t say exactly why. I’ve gone from ‘Why would anyone buy this stuff?’ to ‘A lot of people like their products. That’s fine, I guess. *shrug*’.

      • Flatland_Spider
      • 8 years ago

      It’s becoming more mainstream, so you’re becoming more accepting of it. You’re begin infected by the hipsters. 🙂

    • Meadows
    • 8 years ago

    Why exactly 28 dollars for 1 apple? Demonstrate the maths.

      • Johnny5
      • 8 years ago

      Those American bills don’t appear to have a whole lot of security features… or color. At least the dollar bills are good for strippers. Have you ever tried giving a stripper a $1 coin? It can be a bit tricky.

        • Meadows
        • 8 years ago

        Invalid answer.

        • no51
        • 8 years ago

        I take it you haven’t been to a strip club lately. $1 won’t get you far.

          • UberGerbil
          • 8 years ago

          But what if you paid in apples?

        • derFunkenstein
        • 8 years ago

        dude, she’s not a vending machine.

        • Grigory
        • 8 years ago

        Hmm, actually it sounds like a lot of fun!

      • derFunkenstein
      • 8 years ago

      LOLOLOLOLObama’s government printing money like it’s going out of style!!!!!11one

      • Arclight
      • 8 years ago

      You can’t demonstrate it, unless it was 42…

      • Peldor
      • 8 years ago

      Because it’s a whole apple! Did you not understand that their logo is a half-eaten piece of fruit? My god, you want the WHOLE apple? You better leave your wallet on the counter.

      • Dissonance
      • 8 years ago

      That’s all the US cash I have on hand, and there was only one normal-looking apple among the handful of misshapen ones in the fridge.

      If only I had another $14.

        • Meadows
        • 8 years ago

        You could at least have put it on a towel.

    • Adaptive
    • 8 years ago

    “Right now, the 16GB iPad 2 may be the best tablet deal around.”

    That depends. I suppose for a high-end tablet, yes. But it does seem that the Kindle tablet is encroaching on a lot of marketshare at the lower end. Also, with nvidia announcing $199 Tegra 3 tablets coming this summer, it doesn’t seem like this price structure will last for long (admittedly, Android tablet pricing in general needs to fall).

      • thesmileman
      • 8 years ago

      I own a kindle fire and it is an absolute piece. so unless it was $50 it isn’t a good deal.

        • TakinYourPoints
        • 8 years ago

        The Kindle Fire isn’t very good, but the classic Kindle e–paper readers are still incredible IMHO. Some people may balk at the idea of a single-use device given that everything does everything these days, but there really isn’t anything else out there that is as good for reading books.

          • sweatshopking
          • 8 years ago

          how about a book for reading books?

    • Squeazle
    • 8 years ago

    Interesting title… not sure it fits. They still charge ridiculous prices compared to PC and a large part of their drop in prices is market. They have the top pretty well saturated, so to really see big growth, they needed to find a new audience. They did this by creating new devices, but a lot of it was also done by continuing production of older models and dropping the price. Now everyone can afford to be a smug middle-class college student.

    • derFunkenstein
    • 8 years ago

    In before the cries of “Geoff’s a sellout.” Lol

      • yogibbear
      • 8 years ago

      Yeah… but he is… though I’m not impressed about it. BRB with an axe and a raincoat.

      • Nutmeg
      • 8 years ago

      Well seriously. For a site that spends every article going on about the price per performance for each individual new part released, they sure do have a bit of a hard-on for Apple and their $1000 systems that would cost half that as PC components.

        • demani
        • 8 years ago

        Except the article explicitly disagrees with your point…but don’t let reading comprehension get in the way of your rant.

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