Apple's price hikes went way too far in 2018 (AAPL)

Apple raised prices across nearly all of its product lines in 2018.
Starting prices for some of Apple's most popular products increased by about 20% on average.
Apple says the prices are justified since the products themselves are better than ever, but that's a tough pill to swallow for customers.

Apple raised prices across the board in 2018. You may have noticed.

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In 2016, the starting price of Apples newest iPhone, the iPhone 7, was $649.

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Hollis Johnson/Business Insider

In 2017, the starting price of the most affordable new iPhone, the iPhone 8, was $699 a 7% price increase from the year prior.

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Hollis Johnson/Business Insider

In 2018, the starting price of the most affordable new iPhone, the iPhone XR, was $749 a 7% increase from 2017, and a 15% increase from 2016.

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In 2017, the 10.5-inch iPad Pro started at $649.

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Steve Kovach/Tech Insider

In 2018, the new 11-inch iPad Pro starts at $799 a 23% increase from a year ago.

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Apple

In 2017, the 12.9-inch iPad Pro started at $799.

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Matt Weinberger/Business Insider

In 2018, the 12.9-inch iPad Pro starts at $999 a 25% increase.

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Bebeto Matthews/AP

In 2017, the Mac Mini had a starting price of $499.

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Apple

In 2018, the Mac Minis starting price moved to $799 a 60% jump from the year prior.

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Dave Smith/Business Insider

In 2017, the MacBook Air had a starting price of $999.

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Apple

In 2018, the MacBook Airs starting price moved up to $1,199 a 20% increase.

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Hollis Johnson/Business Insider

In 2017, the latest Apple Watch Series 3, with GPS but no cellular had a starting price of $329.

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Jack Taylor/Getty Images

In 2018, the Apple Watch Series 4, with GPS but no cellular, starts at $399 a 21% increase.

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Justin Sullivan/Getty Images

In 2017, an Apple Watch Series 3 with both GPS and cellular had a starting price of $399.

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Issei Kato/Reuters

In 2018, the Apple Watch Series 4 with both GPS and cellular starts at $499 a 25% increase.

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Justin Sullivan/Getty Images

The price hikes targeted Apples most affordable offerings. More niche or expensive products like the Apple TV and iMac Pro which start at $150 and $5,000, respectively kept their same prices from a year ago.

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Kif Leswing

The price hikes make sense from Apples perspective.

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The cost of innovating is high, and making futuristic devices with expensive components, like the iPhone X with its OLED screen, is more costly than it was before.

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Hollis Johnson

As Apple also alluded to this year when it decided to no longer announce unit sales in its earnings reports, growth across its most popular product lines, like the iPhone, is beginning to slow down. Price hikes help compensate for less business.

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Sean Gallup/Getty Images

But it really doesnt matter what the reason is for Apples price hikes. The bottom line is that Apple can afford to raise prices, because customers will still buy those Apple products anyway.

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Many people are happy to pay extra for Apple products because they believe theyre getting extra quality. Apple is a unique tech company in that it controls the hardware, software, and services across all of its devices, as well as the in-store experience. Lots of people like that.

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Apple

Apple fandom is also a thing. Some people buy all of the latest Apple products because they love the company, and want to own every single new product from them. Price doesnt matter much to those customers.

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CoPilot Live via Flickr

The Apple brand is also huge around the world. Like Nike and its "swoosh" logo, prices seem to automatically go up if a product has that signature Apple logo on it. Apple is technology, but its also fashion.

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Apple

Raising prices is psychological, too. When prices go up, fewer people buy those products, which makes them more rare. This also creates a "wow" effect whenever you see those rare products out in the wild. Maybe it makes you jealous, because you wish you had more money to buy that Apple product.

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Hollis Johnson/Business Insider

Apples pricing strategy probably wont change anytime soon. After all, making innovative products isnt getting any cheaper, and Apples brand is still desirable among people of all ages.

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Nigel Young/Foster + Partners

Still, that doesnt mean Apples price hikes in 2018 were justified from a consumer standpoint.

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Marcio Jose Sanchez/AP

To quickly summarize the price hikes for Apple products in 2018:

The cheapest new iPhone is 7% more expensive than last year, and 15% more expensive than in 2016.
The two models of iPad Pro experienced price hikes of 23% and 25%.
The latest Apple Watch models are either 21% or 25% more expensive compared to the new watches from last year, depending on which model you buy.
The MacBook Air got a 20% price hike in 2018.
The Mac Mini got a 60% price hike in 2018.

Even the new Apple Pencil is 30% more expensive than the previous model.

Did the value of these products increase in the same way their prices did? Not necessarily, but as long as people keep paying for them, Apple has little reason to change its strategy.

Apple's price hikes went way too far in 2018 (AAPL)

Apple raised prices across the board in 2018. You may have noticed.

In 2016, the starting price of Apples newest iPhone, the iPhone 7, was $649.

In 2017, the starting price of the most affordable new iPhone, the iPhone 8, was $699 a 7% price increase from the year prior.

In 2018, the starting price of the most affordable new iPhone, the iPhone XR, was $749 a 7% increase from 2017, and a 15% increase from 2016.

In 2017, the 10.5-inch iPad Pro started at $649.

In 2018, the new 11-inch iPad Pro starts at $799 a 23% increase from a year ago.

In 2017, the 12.9-inch iPad Pro started at $799.

In 2018, the 12.9-inch iPad Pro starts at $999 a 25% increase.

In 2017, the Mac Mini had a starting price of $499.

In 2018, the Mac Minis starting price moved to $799 a 60% jump from the year prior.

In 2017, the MacBook Air had a starting price of $999.

In 2018, the MacBook Airs starting price moved up to $1,199 a 20% increase.

In 2017, the latest Apple Watch Series 3, with GPS but no cellular had a starting price of $329.

In 2018, the Apple Watch Series 4, with GPS but no cellular, starts at $399 a 21% increase.

In 2017, an Apple Watch Series 3 with both GPS and cellular had a starting price of $399.

In 2018, the Apple Watch Series 4 with both GPS and cellular starts at $499 a 25% increase.

The price hikes targeted Apples most affordable offerings. More niche or expensive products like the Apple TV and iMac Pro which start at $150 and $5,000, respectively kept their same prices from a year ago.

The price hikes make sense from Apples perspective.

The cost of innovating is high, and making futuristic devices with expensive components, like the iPhone X with its OLED screen, is more costly than it was before.

As Apple also alluded to this year when it decided to no longer announce unit sales in its earnings reports, growth across its most popular product lines, like the iPhone, is beginning to slow down. Price hikes help compensate for less business.

But it really doesnt matter what the reason is for Apples price hikes. The bottom line is that Apple can afford to raise prices, because customers will still buy those Apple products anyway.

Many people are happy to pay extra for Apple products because they believe theyre getting extra quality. Apple is a unique tech company in that it controls the hardware, software, and services across all of its devices, as well as the in-store experience. Lots of people like that.

Apple fandom is also a thing. Some people buy all of the latest Apple products because they love the company, and want to own every single new product from them. Price doesnt matter much to those customers.

The Apple brand is also huge around the world. Like Nike and its "swoosh" logo, prices seem to automatically go up if a product has that signature Apple logo on it. Apple is technology, but its also fashion.

Raising prices is psychological, too. When prices go up, fewer people buy those products, which makes them more rare. This also creates a "wow" effect whenever you see those rare products out in the wild. Maybe it makes you jealous, because you wish you had more money to buy that Apple product.

Apples pricing strategy probably wont change anytime soon. After all, making innovative products isnt getting any cheaper, and Apples brand is still desirable among people of all ages.

Still, that doesnt mean Apples price hikes in 2018 were justified from a consumer standpoint.

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