Why Consumers Pay More for Apple Products

Apple iPhone 4
Emmanuel Dunand | AFP | Getty Images
Apple iPhone 4

Apple announced this week that its June 6 conference in San Francisco will focus on the future of software.

But the focus right now is on whether the newest version of its popular iPhone is on the horizon and whether it will be priced at a premium.

"If you are an iOS or Mac OS X software developer, this is the event that you do not want to miss," said Philip Schiller, Apple's senior vice president of Worldwide Product Marketing.

The company made no mention of a next-generation phone, presumably the iPhone 5, in its announcement, but rumors are swirling that the device is already in development.

CNBC - Ctia Wireless 2011- The Wireless Connection
CNBC - Ctia Wireless 2011- The Wireless Connection

Apple's announcement got us thinking—aside from running 4G—will the device be worth the pricey Apple premium? For that matter, are any of Apple's products worth that premium?

To get to the core of this issue, CNBC spoke with Wired.com's New York Bureau Chief, John Abell, who came up with the following "Apples to non-Apples" comparison:

Apple Macbook Air and Toshiba Satellite
Apple Macbook Air and Toshiba Satellite


Macbook Air
Cost: $1,000-$1,600
Best features: It's completely portable, ultra light and has a long battery life.
Worst features: The device isn't powerful enough to do processor-intensive tasks like video.

Toshiba Satellite
Cost: $550
Best features: It's much cheaper than that Macbook Air. Simply put, it functions like a computer.
Worst features: The Satellite is bulky and it runs a Windows OS.

Is the Apple premium worth it?
No. A personal computer is a personal computer and a Mac is an expensive computer. While the Macbook Air is a great product, if you're simply in the market for a computer that offers word processing and Web access, you're paying a heck of a premium for the Apple logo.

Apple iPhone 4 and HTC Thunderbolt
Apple iPhone 4 and HTC Thunderbolt

Smart Phones

iPhone 4
Cost: $200-$300
Best features: It holds tremendous cachet and it's very intuitive to use.
Worst features: The iPhone 4 doesn't run Flash and it doesn't have a replaceable battery.

HTC Thunderbolt
Best features: The Android OS.
Worst features: It's a little bulkier than the iPhone and 4G drains its battery.

Is the Apple premium worth it?
Sure. People buy phones for the hardware only complain about the software. With Apple, there is no single hardware competitor. They are simply the best. Furthermore, a phone is an accessory and the iPhone has tremendous cachet.

Apple iPad 2 and Motorola Xoom
Apple iPad 2 and Motorola Xoom


iPad 2
Cost: $500-$800
Best features: It's a great value.
Worst feature: Like the iPhone, it doesn't run Flash.

Motorola Xoom
Cost: $600-$800
Best features: The Xoom ties perfectly into Google's Eco-system.
Worst features: It's not as easy to understand how to operate.

Is the Apple premium worth it?
Actually, you're not paying a premium here. This is the rare case of the competitor's entry-level product being more expensive than Apple.

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"It all boils down to ease of use, design and cachet," Abell says. "Bottom line, you can always pay less for a product that basically does the same thing that its Apple counterpart."

That said, Apple paves the way when it comes to innovating both its products and its brand. "Without Apple, there wouldn't be items like tablet computers...but it's the company's marketing prowess that has done a tremendous job of getting consumers to think they need the product."