Why Hasn't Apple Made This Margin-Boosting Move Yet?

Apple  (NASDAQ: AAPL  ) upsells commoditized components better than anyone. In its iDevice lineup, the company charges $100 for incremental levels of additional storage, most of which goes straight to margins. In its Mac lineup, Apple does upsell Intel  (NASDAQ: INTC  ) processors in Macs, typically for $200 to $300. Again, most of that price increase goes to pad margins since Intel's processor prices don't climb that dramatically. 

In the video below, Fool contributor Evan Niu, CFA, explains why he thinks Apple should pursue this margin-boosting strategy.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. Eric Bleeker, The Motley Fool's senior technology analyst and managing bureau chief, is prepared to fill you in on both reasons to buy and sell Apple and the opportunities left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


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  • Report this Comment On April 16, 2013, at 6:40 PM, montanasoftware wrote:

    Maybe there would be issues with manufacturing assembly lines? Having so many options would clog up the manufacturing process?

    I don't know ... just guessing here.

  • Report this Comment On April 16, 2013, at 7:18 PM, Jjkiam wrote:

    Good point ! One reason may be the addtl distribution problems of offering many more minor configuration options in their inventory. But who knows maybe they will adopt this idea. Certainly not a bad way for them to boost incremental revenue if it could be done efficiently without creating a mess of their inventory management efforts which most acknowledge as superior

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