Mac and iPod Prices Reaching Even Higher?

Apple products command premium prices. A quick scan of the computers on Amazon.com's Best Seller List will show Apple computers in 10 of the 25 positions. In that list, according to J.P. Morgan's industry analyst Ingrid Ebeling, the average Apple selling price is $1482. All other computers listed averaged less than $600.

Three years ago, in 2005, when average industry prices were falling from $1042 to $957 for a PC, Apple Macs stayed solid at $1442. That means that in the last few years the average Mac price has actually increased. (Source: appleinsider.com)

That's a good thing, right?

To be able to keep your price high (or even raise it), when others are dropping their price? Financial analysts think so. Apple's worldwide market share has risen from 2.3% to 3.0%. That would suggest that Apple is experiencing growth at 29% per year while the entire PC industry in only experiencing 12% -- even with the higher prices.

However, Apple's pricing magic may not extend to the ever-popular iPod. It could be sporting a higher price soon but for other reasons. Recently, Apple announced disappointing iPod sales results but, in spite of that, many expect that the average price of iPods can be maintained or increased due to the iPod Touch and the increased need for a media-intensive mobile platform.

Unfortunately, the Record Industry Association of America (RIAA) and similar international organizations want to levy a surcharge on the storage of CD players and MP3 players. Their rationale is that these devices are used to store and trade illegal copies of music. This would echo a similar levy already in effect for blank CDs and blank tapes. Obviously, if this levy were to go through, the effect would be to lift iPod prices out of proportion of the demand for the product. (Source: macobserver.com).

Whatever Apple's Mac or iPod prices, it is clear that the demand for their products has allowed them to maintain a premium price position. For the Mac, however, one can't help but wonder whether maintaining their price has cost them a substantial market share. For the iPod, even with its widespread demand, the real price may have to be adjusted to compensate for a usurious levy by the record industry.