Apple’s decision to raise the prices may be faulty, while the unit sales could be considered profitable. The company’s strategy combines low-cost and differentiation modes, although it has not mixed these strategies recently. Namely, iPhones that sold for low prices gained popularity among the public, and the abrupt change in the pricing can avert customers from buying the products. Meanwhile, the additional details for already bought phones are difficult to substitute. Thus, concentration on the selling of the kits to the main products is more reasonable.
Next, service revenue should improve if the strategy mentioned above is applied. As the prices for the new iPhones have risen, the services should attain more demand than previously. In my opinion, it is cheaper to pay for repairing phones than to buy a new product. Additionally, devices like AirPods or chargers can be purchased more frequently, adding to the services’ revenue. Therefore, the pricing policy will affect Apple’s unit income positively.
The adaptiveness of Apple’s strategy to new market demands requires constant tracking of prices for a consultant. If I were one, I would check the costs for service in the competitive stores. Any lowering of the fee would give only an advantage; if one store does it, the others immediately analogously change their prices. To keep the income stable, everyone should account for the average tariffs.
Apple stock is relatively inexpensive since the company is an economy of scale. Moreover, it is a transnational corporation with a large budget. Apple can afford the immense production of its devices for low costs while adhering to the quality principle. Additionally, the organization has loyal customers that would buy the products because of Apple’s reputation. Therefore, already building capital and prestige allow the company to manufacture cheap products.
The service is becoming more valuable for the company because it presents an opportunity to sell more goods or offer repair options if the main products are somewhat damaged. The quality service would grant even more customer loyalty, and in the future, they can buy other costly devices. In brief, the service provides a source of substantial profit while the high-priced products are not demanded.