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Why You Spend So Much Money At Apple

Why You Spend So Much Money At Apple



Apple has revolutionized technology as we know it, from its sleek, high-quality designs to friendly retail employees and hyped up launch events. The tactics are paying off. Despite the pandemic, revenue rose 6% year over year in fiscal 2020. Here’s how Apple uses its ecosystem of hardware and software to keep customers hooked.

Since Steve Jobs announced the first iPhone at a MacWorld event in 2007, Apple has released more than 20 iPhone models. Over 80% of Americans had a smartphone in January 2019, and the same year, there were 900 million active iPhones in the world, according to Apple CEO Tim Cook. Yet when Apple announced the iPhone 12 on Oct. 13, an estimated 2 million people preordered the device in the first 24 hours alone.

So why, when iPhones are already ubiquitous, do fans hype and covet every new iPhone release? Here are the psychological reasons it’s hard to resist the new iPhone.

We’re attracted to ‘what’s next’
Each new iteration of the iPhone has new features: For example, the iPhone 4 in 2011 brought the first front-facing “selfie” camera, while the iPhone 5S in 2013 introduced Touch ID fingerprint scanning. The iPhone 12 boasts a larger screen, faster 5G network connection and more advanced cameras.

But even if your current iPhone functions fine without all the new bells and whistles, “people are attracted to those improvements in quality and capability,” says Kelly Goldsmith, associate professor of marketing at Vanderbilt University in the Ellen Graduate School of Management.

Each new phone, and also Apple as a brand, represent innovation and “tomorrow,” which consumers tend to hold to a high regard, says marketing consultant Katie Martell. “We really do live in a world where what’s new and what’s next is considered most valuable.”

It’s part of your identity
In 2011, Apple’s competitor Samsung debuted a commercial that parodied people in line outside of what resembles an Apple store, waiting for a new smartphone release. “If it looks the same, how will people know I upgraded?” asks one customer in line.

Having the latest and greatest phone is a status symbol, Goldsmith says. “It’s something that you carry with you all the time, so it conveys information about you to other people,” she says.

Your phone is also a strong mechanism for something called “self-signaling,” a concept in behavioral economics that has to do with how your actions influence your beliefs about yourself.

In this case, having the newest iPhone can boost your self-esteem and remind you that you’re not outdated. “Every time you look at that phone it tells you something about who you are, and it reinforces certain aspects of your own identity,” Goldsmith says.

Apple in particular tends to empower consumers with messaging about what they can do with their new iPhone, Martell says. For example, Apple encourages people to share their photos shot on the iPhone with the hashtag “ShotoniPhone,” to be included in Apple billboards and ad campaigns. This signals to consumers that, “you’ve got that power in your hands.”

There’s perceived scarcity
When a new iPhone becomes available, it’s customary to see lines snaked around Apple stores hours before they open. Apple fans want to be the first to have and use a device, and avoid having to wait for shipping delays. (Even this year amid the pandemic, people waited for the iPhone 12 outside Apple stores around the globe.)

To consumers, a line outside of a storefront signals that whatever is inside is valuable. There are two behavioral economics concepts at play here: social proof (convincing people that other people want the product) and scarcity (the fear that there may not be enough), Goldsmith says.

Research has shown that when you think an item is scarce, it heightens your arousal and makes you feel panicked to make a decision quickly. The perception of scarcity makes you less discerning and more likely to go with your favorite item, rather than research other options.

“That just makes you want to click ‘buy,’ makes you want to get the line and makes you not want to miss the boat,” she says.

“Consumers respond, almost too strongly, to these scarcity marketing tactics,” says Goldsmith.

Apple declined to comment on this story.

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Why You Spend So Much Money At Apple

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27 thoughts on “Why You Spend So Much Money At Apple

  1. What brands have you hooked? Let us know in the comments below:

  2. I always hear about how people who use android love the customizability of the platform, but every single person I’ve ever seen with an android phone is using the stock skin that whatever manufacturer put on it. 99% of the time people are just gonna use the phone how it comes out of the box, and that’s why the iPhone is so popular in areas where people can easily afford it.

  3. It’s not price gouging. Apple products last longer than equivalent android or windows products.

  4. Green bubbles don’t matter, but was does is compression. SMS is garbage.

  5. 10:38 Apple makes their money from hardware sales, that's why the iPhone is at a 64% profit margin. The reason for that is because they don't try to sell their customers' user data to third-parties to make a profit.
    Another reason why Apple will never sell a television, because profit margins are super slim, and they can't justify the price. Not a market where people want to upgrade their television every year. So they just sell the tv software in a small box for $149 – $199.

  6. Mac switching to ARM with its custom SoC solves the issue of being $300 more than the equivalent specs of a Windows computer or laptop.

  7. No worries about the green bubble. At some point, Apple will have to adapt to RCS messaging to have a better bridge with Android Phones.

  8. PC is better for computes and Apple is better when it comes to phones

  9. They said they deliberately slow down iphone but they are the only company who support a 7 year old phone. No android even the googgle phone are not supported after 3 years hahaha…

  10. They pretty much did invent the PC for all practical purposes then Viscalc made it useful years before IBM even got into the market… Sure there were others but the Apple II was the first mass produced PC.

  11. I have a 2007 17" Macbook Pro, I had a 2011 13" Macbook Pro that I gave to my sister this year. I bought a 2012 21,5" iMac in which I installed an SSD. I bought a 2015 13" Macbook Pro where I installed an .m2 512 GB SSD instead of the 128 GB proprietary SSD.

    I bought an iPhone 11 last year. A week ago I bought an Apple Watch SE.
    My first Apple product was either the iPhone 3G or the ipod 2007-ish.

    The ecosystem was not great at the beginning, but the UI was always better than what I had at the time.
    The iOS vs Android can be questionnable because setting up ones phone can be a b*tch compared to Android, but the overall user friendliness is good for Apple products.

    Didn't buy the Airpods Pro though. I went with the Jabra 75T.

  12. Why You Spend So Much Money At Apple ?
    Answer cult like behaviour of customers who think they have the best tech (but objectively really do not) and equate the success of a brand with them. Some goes for Tesla the car version of Apple

  13. I miss when I would pay 200 for an iPhone with 2 year plan. I would sell it on Craigslist for 200. Everyone ruined it because they wanted a new phone and iPad every year…

  14. I watch this and I feel even more aligned with Apple products being my choice.

  15. Why is there lots of indian in comment section lol

  16. I had apple products and Android.
    I prefer Android… It keeps you free. Not captured in ecosystem.

  17. Watching this video on non apple phone

  18. The misty doctor conclusively spell because pea methodologically found on a acceptable lip. gamy, diligent shrine

  19. Imagine comparing the tiny AirPods to the Sony WH-1000XM4. 😆 I have some realme wireless earbuds, they sound great for their price, but there is no way that anyone could say anything so small to be better than 40mm drivers without laughing.

    Also: 7:41 – It doesn't work with Android phones at all, but thanks for playing. 🙄

  20. Imagine if apple makes a folding phone in the future and they pretend that they're the first ones to make a folding phone lmao
    "InnOvatIoN"

  21. Because NO BRAIN 😂😂😂😂😂😂😂😂😂

  22. The acid curler dimensionally pick because processing multivariably double aboard a fresh kitchen. blue, abounding question

  23. Because I’m able to afford their products

  24. Based on the comments i read in Apple product reviews here on youtube, i am not liking the Apple culture…tho i don’t think its the company’s fault… most of their consumers don’t know the meaning of contented…when Apple releases a product people are always waiting on the next one instead of buying whats already out… it doesn’t help that some tech channels are always putting out rumor videos exciting more people on things that don’t exist yet…The fact is the Apple culture is all about getting you to spend spend spend, they want every dime in your bank account…and if you’re one of those die hard Apple fans that has to get everything they put out…its not gonna help your life savings plan

  25. As an Apple fan, I’m scared to read the comments…

  26. No green bubbles “.”

  27. the problem with apple is that they sell old tech like its new…going to convert it back

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