Last week Apple announced a brand-new audio product called AirPods Max. The tech giant had long been rumoured to release over ear audio AirPods however the anticipated name was i AirPods Studio. The biggest talking point about this announcement was not the name, or even the product itself but the price. Most analysts had estimated a price of around $300/£300. Instead what we got was a price point of $549/£549. In this article I’m not going to tell you that this price point is justified or to the contrary not justified. But what I am going to do is tell you why the product is priced in this way and it’s up to you to decide if you think that that it’s justified or not.
Before we get to that though I’d just like to start by addressing a couple of articles that I’ve seen floating around the Internet over the last few days. One article that I found particularly nauseating, concentrated on the argument that Apple shouldn’t have released a product at this price point during a pandemic. However ‘newsflash’…. since the start of the pandemic Apple has also released products that cost over £1000/$1000 such as the recent iPhone 12 Pro, various MacBooks and iPad Pro models to boot. And on the opposite end of the spectrum they’ve also released much more affordable versions of some of their most popular products. For example the iPhone SE which contains the flagship A13 bionic chip from the iPhone 11 Pro and of course more recently the HomePod Mini.
I personally find this sort of argument quite infuriating because Apple is a company, a corporate entity and not a public service or a charity. Apple can price its products at whatever price it chooses to and it doesn’t owe anybody anything. As a company Apple doesn’t deliberately choose to price products so excessively high that they’re out of reach. What Apple tries to do is create high-quality products that offer value at their respective price points whilst taking a healthy margin. Perhaps there is an argument that the margins are too high but if one thing is true, Apple tends to price with a fairly consistent margin in most cases of around 35-40%.
I also saw a tweet that described the AirPods Max as a product that “automatically mutes out poor people”. This was also one of the most ridiculous tweets I’ve ever read for the simple reason that there is plenty of competition in the headphone market at various price points. This one particular product is an expensive product undoubtedly. But that doesn’t mean that it’s the only option or the only choice that you have even within Apple’s own product range. But let’s look at other products and services outside of the technology space for a moment. You could buy a desk for as little as £50 or you could spend over £5000 on a desk. You can stay in a hotel room that costs £30 for a night but you could also stop in a hotel that costs £3000 for a night. The point being that this is how commerce works. There are products which cost less which may not offer some of the features or maybe they use lower quality materials but they still get the job done. And you choose the product that fits within your own budget. To reiterate Apple didn’t create the AirPods max to price out people on a low budget. Apple created this product for people who want or need the best possible audio experience, made from premium materials and in exchange, you have to pay more for that.
I’d probably have more sympathy with some of these arguments if this was the only audio product that was available on the market or it was Apple’s only headphone offering. The fact is though that this just isn’t the case. The headphones market is incredibly saturated and the competition is fierce at pretty much every price point. That brings me nicely onto my next point. Let’s take a look at Apple’s range of headphones offerings for a moment. The least expensive set of headphones that Apple sells are it’s wired EarPods at £29. They don’t offer anywhere even close to the sound quality of AirPods Max and they don’t have the fit, finish or build quality that the AirPods Max have either. But what they can do is allow you to take phone calls, skip tracks, play and pause music, ask Siri a question and most importantly consume media. They get the job done. Then there are AirPods which cost £159 with a wired charging case or £199 with a wireless charging case. That extra cash gets you seamless and easy connectivity and pairing with wireless audio. And more recently AirPods Pro were introduced at £249 which do offer some of the features of AirPods Max such as noise cancelling and transparency mode. On the 28th of May 2014 Apple also acquired Beats by Dre. Through Beats, Apple creates and sells headphones at a number of different price points from as little as £49 with Beats Flex all the way up to £300 with Beats Studio. Many of the Beats products also include technology from AirPods such as The H1 chip for instant pairing.
Taking all of this into consideration and the multiple price points that Apple offers audio products and headphones at, the higher end (some might say luxury price point), is the only market that Apple wasn’t yet competing in. And £550 isn’t luxury. £550 is certainly aspirational but a luxury price point it is not. A luxury price point is something that a person on a typical wage would never be able to afford even if they saved for many years. Examples of Luxury products are items of clothing that cost thousands of pounds or a Ferrari…. or a Porsche. Not a pair of headphones that cost £550.
Now do I wish the AirPods Max cost less? Of course I do! And do I agree with the price? I haven’t tried them yet so I can’t tell you. But who wants to spend more money if they don’t have to? When all is said and done there are plenty of alternatives at much more affordable price points and some are truly excellent products! The question of whether or not AirPods Max are worth it at their price point is a matter of personal opinion. Sound quality is subjective. What sounds great to one person might not sound great to the next person. Equally the product could sound amazing but not to the point where you value that enough to drop £550 on them. For people that want or need excellent sound quality and are willing to pay more for that, AirPods Max fill a gap in Apple’s own ecosystem.
It’s important to recognise that Apple is run by people that build products that they would be proud to own and use. They don’t pick a price point up front. They build the product with a feature set in mind. Sometimes they’ll be able to price the product more aggressively like with the iPhone SE. And often when they do that, they’re able to do so by recycling parts that have already been tooled and machined. In the case of the SE, they recycled a design and parts from the iPhone 6 through 8. What they don’t do is set a price up front and craft the product around the price. Pricing is decided often late into the development process.
When it comes down to it if you want a pair of AirPods Max and they’re within your budget to buy them, go for it. And if they aren’t inside your budget or maybe you just don’t like the product that’s okay too! There are plenty of great alternatives and there will be other Apple products for people to get excited about in the future (and debate on!).