The happy greeters at the Apple Store always make me feel welcome, though never special. Maybe they should. After all, if I start to add it all up, I spend a fortune on Apple gear. I suspect I'm not alone among the Apple faithful in that.
Apple is the richest tech company in the world. Though nearly all their money comes from hardware — and in highly competitive markets, such as smartphones and laptops — Apple profit margins are at a shockingly high 38%. The company has long commanded a premium from its customers.
That premium is starting to hit me hard.
That's not just because of Apple's higher prices, but also because so many of their products are deliberately complementary. Apple CEO Tim Cook has claimed that Apple "embraces" product cannibalization, but that assertion rings hollow to me. On Apple's most recent earnings call, Cook boldly stated:
I see cannibalization as a huge opportunity for us. Our core philosophy is to never fear cannibalization. If we don’t do it, someone else will. We know that iPhone has cannibalized some of our iPod business. That doesn’t worry us. We know that iPad will cannibalize some Macs. But that’s not a concern.
Cook isn't lying. Better that Apple cannibalize its own products than someone else does. The problem, of course — if that's what this can be called — is that iPhone, for example, doesn't replace my iPad. Which doesn't replace my MacBook. Apple product innovation isn't about cannabilization so much as extension, making it more attractive for me to replace someone else's product with a shiny new Apple device.
For good or ill, I seem to fall for it every time.
At work I use my MacBook Pro. I use my iPod while at the gym. I use my iPhone for calls, texting, video recording, a quick game. At night, I turn on the Apple TV and stream the latest blockbuster. I lay in bed with my iPad, reading, surfing. Each of these pricey devices works best for specific uses. This is a core part of their design - and Apple strategy.
The iPad has not and likely never will replace my iPhone. Nor will it ever replace my laptop, which will never replace my Apple TV, which has never even met my iPod. Add it all up and Apple should treat me like Kim Kardashian.
Don't believe me? This is my Apple spend for the past 12 months:
MacBook Pro (13-inch: 2.6GHz with Retina display): $1699
- AppleCare Extended Warranty Coverage: $249
- Software and Apps: $500*
- Time Capsule (2TB Storage): $299
iPad Mini (32GB, WiFi only): $429
- Smart Cover: $39
- iPad Apps and Media: $200
iPhone 5 (16GB): $649
- AppleCare Extended Warranty Coverage: $99
- iPhone Apps and Content: $300
- Mophie Juice Pack: $80
- Car Charger: $35
Apple TV: $99
- Programs and Movies: $150
iPod Shuffle: $49
Add it all up and Apple cost me... $4,876.
Oh my God. Is that right?
That doesn't even include my wife's iPhone, nor our older MacBook, nor tax, nor any shipping costs. Nor does it include the cost of voice and cellular data service for my iPhone, nor the cost of WiFi when I need to turn my iPhone into a hotspot to support my MacBook or iPad. All that accounts for at least an additional $1,000 per year.
I also didn't include the cost of any accessories, speakers or complimentary products, except the Mophie battery pack, which is a must in my line of work, and the car charger.
Although, to be fair, there is one product that Apple cannibilized. I did not buy Apple's sleek new and very expensive iMac. No need. I already have a three-year-old iMac that, in fact, was rendered useless by my new MacBook Pro. Which, if I haven't said already, is a thing of beauty.
I shudder to think what will happens if and when Apple comes out with that "iWatch." After all, that certainly isn't going to replace any other Apple product, except perhaps my iPod Shuffle. Will it really cost only $49? I doubt it. I may need to take on a second job.
What about you? How much have you spent on Apple products in the past year?
*NOTE: All software, content, games and apps spending is estimated.
Apple Store image courtesy of Shutterstock