Why iPhone 5 is so Expensive

There’s no doubt about it, Apple phone are the most expensive on the market, even compared to those with hardware that is pretty much the same, yet whenever a new model is released it sells like hotcakes. The iPhone far outsells any other specific model of phone every single time, even though, some would say, there are far better phones with a cheaper price tag. So how does Apple get away with charging so much more yet still manage to break records ?

Cost of Production :
Well, there are several reasons for this. First, let’s take a look at the cost of actually producing one. The iPhone 5 costs, brand new and depending on the specification, between $649.99 and $849.99 to buy without a contract. The cost of production for one phone is around $250; add to that the cost of producing the new iOS, the apps that are included on the phone and all the salaries and you can start to see where the price creeps up.
Advertising Cost :
Advertising is the next point – Apple currently spends far more than any other manufacturer, and they are one of the single biggest advertisers. The iPhone 5 adverts started when the iPhone 4 came out. Kantar Media say that Apple spent around $250 million on advertising in the last year alone and that money has to be recouped somehow.
Stringent Quality Control :
Then there’s the consumer. Most Apple owners will buy another one, regardless of the price. Solid, high quality build, sleek beauty and style see to that, along with the App store that has far more choice than either Android or Windows does.
Subsidized iPhone’s :
Finally, there’s the apparent savings – buying on contract gets you the phone at a knock down price, giving the illusion of a bargain. Add up the monthly contract fees though and it isn’t such a good deal. There’s also the fact that there may be a budget phone in the offing and, as Apple made so much profit from US sales of the iPhone 5 alone, they can afford to produce an even more expensive one if they so wish – knowing that people will buy it.
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