Why do tech prices vary so much? -thebytewise

Do you get totally confused while searching for a new laptop or a cell phone? Ya, it happens to all of us, but have you ever wondered why actually their prices vary so much even though they might have almost the same hardware and some even offer a higher price for a lower-end device.


Well answering this question is like answering "why apple products are so damn expensive compared to Samsung?" or "Why Adidas is more expensive than some cheaper alternative" I mean why not, at last, even the cheaper products serve the same purpose right??? Uhhh no, although parts of this claim are true, there is a lot more to it. Consider this, the Macbook air which has an intel i5 @ 1.1 GHz cost around $1000 whereas any other windows PC with the exact same specification will cost less than half of that, while both the products use the same hardware still the prices vary so much, this variation in price actually depends on a lot of factors.


1. Cost of R&D


Although the hardware used in that product might be way less expensive than the actual product, but the actual process involved in getting up to that final product is quite high this is called the Research and Development stage (R&D). Whenever a company starts working on a new product there is a lot of pre-requisites and research involved in that, of course, this will vary from company to company, but at last, the cost involved in the development process of that product adds up to the final cost.


2. Profit margin


This factor completely depends on the manufacturer, some manufacturers agree to provide a better-valued product by cutting down on their own profit margin, whereas some just want to get as much profit as they can. Now, this doesn't mean that every company just thinks about their own greed, as increasing the price of one product will leave them with R&D money for any upcoming projects. While on the other hand, the company which is offering a lesser priced product, doesn't really involve that much of the R&D process.

Now you can ask "so what's the point of R&D on products like Laptops? As they are generally built around the same wireframe". Yes, this is true, but the profit they get from that device can help the company develop other products and later sell them fairly priced. For instance, what would you prefer as a consumer? A slightly overpriced Laptop or a pair of insanely priced Earphones. Here, by increasing the price of the laptop they are able to manage the cost for the R&D process of the earphones.


3. Company value


Now, the value of the company also plays a great role in deciding the price of the product, companies like Apple tends to move towards more of a "luxury" sector thus increasing the price of their products. But whereas lesser-known brands lack their competition in the market. And as a consumer also we tend to go toward the more familiar bands rather than newcomers. That's why new or lesser-known companies have to decrease their prices to keep up with the competition.


4. Support


This is the most important point, popular companies spend a ton of money on their support systems. Every time your expensive laptop breaks you run to the nearest service center and get it fixed and even sometimes get a replacement, running this type of service facilities requires a lot of backend work and money.


conclusion


Not every company runs only after profit, for some, you actually get what you paid for even though it seems a bit overpriced in the beginning but in the long run, you get your money back. Whereas sometimes the exact same company does something stupid that doesn't make any sense (like $700 wheels). So getting value for money product is not impossibly hard with a bit research you can get a product that will prove to be of good value for your money.

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