Apple is profiting from the pandemic, and some might, at first blush, (wrongly) assume that’s bad. Akin to profiteering. But, actually, it’s an outward sign that Apple is doing things right for its customers.

COVID-19 Side Effects

This train of thought occurred to me after our Charlotte Henry and I discussed two of her articles on Mac Observer’s Daily Observations Podcast for August 26. It also was ignited by lamentations I’ve seen critical of big companies prospering at the expense of smaller ones.

  1. iPhone SE Helps Apple as Rivals See Smartphone Sales Tumble
  2. Sales of MacBook Range up 20 Percent

First, a small detour. It’s true that small businesses suffer in a pandemic. They tend to be locally constrained, underfunded, and have a very specific product portfolio. A pandemic affects that kind of business in natural, specific ways that cannot be helped. Larger, wealthier, global companies are just more resilient.

Complaining about that strength misses the fundamentals of economics. It’s like saying a 140 lb. man should be entitled to be an NFL defensive tackle.

But, more to my point. Why is Apple doing especially well? Especially since its products tend to be on the expensive side.

The Mac’s Proposition

I think the answer lies in the psychology of dealing with a crisis. One example is the selection of a notebook computer. In the workplace, there’s typically an I.T. department that can handle computer and network issues. But WFH changes the calculus. One can’t afford to spend time troubleshooting a PC. Or fighting malware. There’s work to be done, and one has to focus on productivity, not geek play.

Buoyed by some extra cash from not having to drive to work every day, eat out, maintain a wardrobe, many office workers are willing to spend extra on what’s commonly accepted as the very best computer in design, durability, and privacy/security. It’s a personal judgment.

That Apple profits from its focus on high quality products in a pandemic is an accident of customer needs, not the designs of an evil empire.

The iPhone Proposition

The same kind of argument applies to smartphones. However, in the case of a phone, with cash tight, it’s hard to justify a US$1,200 iPhone 11 Pro Max when an iPhone SE (2nd gen) for $399 can do the essentially the same things.

Apple originally designed the iPhone SE to better compete in foreign markets that are highly price sensitive. That the iPhone SE sales have surged in a pandemic, when funds are even tighter, is a happy accident.

It is said that the best players have the best luck.

A very large, well-funded, global company has great resources. It is, by design, very good at anticipating problems and dealing with them. A quality, diverse product line and a resilient supply chain lead to market success.

Social Responsibility

Apple need not be ashamed of prospering. In fact, Apple uses its wealth in positive ways to contribute to its community. Here is just once recent example: “Apple Donating to Wildfire Relief Efforts in California.

Not all companies build extremely high quality products that can be depended on for years, And then be such good stewards of the ensuing wealth. Apple is one of those … conducting itself responsibly in a crisis.

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Lee Dronick

It isn’t like they price gouging.

Totally agree with you Mr. Martellaro, as well as with the comments of geoduck. I have literally seen my local supermarkets take advantage of this crisis by raising the prices of certain food items as well as toilet paper. Totally disgraceful! I commend Apple for being able to sell a great powerful phone like the iPhone SE for the price! That said, a co-worker of mine just showed me her new iPhone 11 Pro Max today that she just purchased. Apple keeps on keeping on for a reason: they provide quality products that people take pride in owning.

geoduck

Profiteering would be, to my mind, raising prices of an essential commodity during a crisis. If, for example you were the only supplier of brass during a war. They want to make ammunition and you double the price to increase your profit. That’s profiteering, and that’s unconscionable.
Apple is not the only supplier of anything. There are other computer and phone, and software companies. Apple also did not raise prices as a result of the crisis. Their profits have gone up because they make the best, not because they make the only.