The new Apple is a direct result of inequality
The rich have a huge share of the wealth, and they need something to spend it on.
Today’s Apple Event had two main focuses: the new MacBook and the Apple Watch. These two products are quite different from the company’s past products, primarily because of how they’re positioned.
The new MacBook was presented in a way that’s very different from past MacBooks. Yes, it’s thin, but its appeal isn’t about that, nor is it about performance, because it doesn’t seem like it can handle much more than basic tasks. Instead, the new MacBook’s selling point is what it represents. It helps that it’s beautiful, but it’s more about having what’s new, and being able to show it off.
When talking about the MacBook, Tim Cook made a point of noting how you see MacBooks everywhere now. This is a MacBook you want people to see. It’s not a productivity tool, but a fashion accessory. This fact is underscored by the constant emphasis placed on the new MacBook’s gold colour.
The Apple Watch continued this trend. There’s little unique about the actual functionality of the Apple Watch, despite what Apple wants us believe. Its functions can be done by nearly every other smartwatch on the market, and the on-stage demonstration only showed how the Apple Watch can do the same functions as the iPhone but on your wrist.
Apple took design porn to a new level in its videos for the aluminium and steel versions of the Apple Watch, but what really settles Apple’s new focus was the announcement saved for the end of the keynote: the Apple Watch Edition will be limited in quantity, and will cost $10,000. The words were quickly delivered, almost as if Tim Cook still wasn’t certain if they’d gone a little too far.
And that wasn’t even the full truth. Sure, the small one with the basic band costs $10,000, but the most expensive is actually $17,000, and oddly it’s the small Apple Watch Edition, simply with a nicer band. This only acts as another example of how the pricing has no basis in actual value or cost of assembly, but on how much Apple has chosen to charge its wealthy customers.
Apple, the luxury brand
Apple has always been more expensive, but it’s still been achievable. Its customers have paid a premium for design, ease-of-use, and the brand, but this takes premium to a whole different level.
Over the past several decades inequality in both income and wealth has been increasing in much of the Western world, most notably in the United States. During that same time other economies, like that of China, have been developing rapidly, though the spoils of their growth have been unequally seized by the wealthy and powerful.
To its customers in developing economies, Apple was already a luxury product, but as its most dedicated customers in those markets begin to reach levels of wealth similar to those in the West, Apple seems to be adopting the image it has cultivated with those customers on a global scale, instead of its Western image. It’s important to note Apple has been ranked China’s top luxury brand.
Why have they chosen to become more of a luxury company than a high-end technology company? According to his profile in The New Yorker, Jony Ive has been pushing for it for a while. Tim Cook must agree, as the customer base for luxury products is growing, partly due to inequality.
As the United States’ middle-class shrinks, the top 20% of income earners are now responsible for 61% of personal consumption expenditures, as well as 90% of the growth in consumption expenditures between 2009 and 2012. As a result, the luxury markets are predicted to see stable long-term growth moving forward.
Another report shows that while consumer spending grew in 2013, it was mainly due to luxury items, and I’m sure you can guess who was buying them.
Considering this knowledge, is it a surprise to see Apple embracing the luxury market? No. It’s simply another sign of how our societies are becoming more divided, and the rich need things to spend their money on.
