3 ms·
I think you might be misreading the word "high end"? By "high end", the person you're replying to was (probably?) not referring to "luxury", but rather the "hi
by gen220 4y ago
I think you might be misreading the word "high end"?
By "high end", the person you're replying to was (probably?) not referring to "luxury", but rather the "high end" of the affordability spectrum. i.e. technology that is cutting edge and hasn't yet reached economies of scale. The first iterations of each of those product lines were expensive to procure, which meant their initial margins were thinner and their initial prices were higher.
The "mass market" version of each of those products was not created until the second, third, or arguably fourth generation. Those generations are the ones where the price of components has come down, to the point where you start to see truly affordable options (iPhone SE, Airpods 2, Watch SE).
Apple's insight is that the R&D work required to produce "pro" versions of their hardware (as well as the work required to produce v1) of each product line improves the performance and cost structure of all the "lesser" versions.
They famously derive R&D budgets for gen X+1 as a function of projected profits from gen X and X-1. This connection to the "market" is a strong explanatory variable for the success of their R&D fly wheel since the iPhone. It's a major contrast against how their competitors have historically operated (cough Meta).