Fundamentals from the perspective of a consumer: if you buy a HomeKit-certified device, you'll be getting something pretty good. There might not be any HomeKit-certified devices because the development process is/was onerous, but that's a separate question from what consumers get in the end from the devices that do make it through that obstacle course.

Yeah, agreed. The one other issue, though, is that I think it's wrong to evaluate the quality of each device in isolation. From Apple's viewpoint HomeKit will be a success iff there are a wide range of quality products for it. They're trying to sit at the center of an ecosystem, and that means not just offering quality but hitting critical mass.

A lot of IoT stuff is complete junk, though. People make complaints about Apple products being overpriced but the expectation is reverse of reality. This is what it costs for a quality product. Sure you can make things cheaper, but you have to cut somewhere. Is having your living room lights being part of a botnet worth saving 10% off the purchase price?

Just because item 1 is cheaper than item 2 doesn't mean item 2 is overpriced.

This is exactly what I hate about all the internet arguments about Apple in general. When an anti-fanboi screams that they can get the exact same computer for $1000 cheaper because of the "Apple tax", I abandon the conversation completely because they've clearly either never used an Apple device or they're completely ignoring the fact that their $1000 cheaper device has cut corners somewhere whether that's in build materials, features (like the keyboard backlight or display), or just general quality of experience. Things aren't just more expensive because Apple wants them to be more expensive. They'd be forced to shut down shop by all the competitors that could undercut them. Instead, they're one of the most valuable companies in the world because people that actually do spend the extra money agree that it's not just an "Apple tax" but a higher-quality product.

I agree with your general sentiment, but please let's not be naive about Apple's business practices - last time I checked (2 years ago?) Apple's company wide profit margin was about 30 - 40%. So yes, Apple's products are superior and you definitely get something in return for the higher price, but the Apple Tax itself is definitely real.

While that's true, I've also read years and years of stories about how virtually every PC maker other than Apple is dancing on a razor's edge due to paper-thin margins. Dozens of manufacturers in the last two decades have gone under, been bought out or left the market; PC laptops used to be (and may still be, in some cases) crapped up with bloatware and festooned with stickers because each sticker you have to peel off and each bit of software you don't want is necessary extra revenue; the survivors like HP and Dell seem to bring in more profit through enterprise-level service contracts than hardware. And in the smartphone business, there have been quarters where Apple and Samsung together are making more than 100% of the profits because everyone else lost money.

...so, it at least seems plausible to me that Apple may be setting the prices for their PCs and "post-PC" products more correctly than most of their competitors. Even if that's true, the Apple Tax could still be a thing -- but the premium may be magnified by the "lose money on every unit and make it up in volume" tactic so many PC makers seem to have had through the 2000s.

True but only to a point. Apple's scale gives them a price advantage from suppliers, which increases their relative margins.

Also note that not all parts that seem comparable are. For some parts like LCD panels that have more variance in quality, Apple has deals with suppliers to get the best panels while Dell and others have to buy the ones that don't hit quite as stringent QC.

Both of these are why looking at margins alone doesn't give you a complete picture.

Is there anything wrong about making a profit on a product you sell? How are they supposed to grow their business otherwise?

Sorry, but the Apple Tax is very real on their computers. Laptops, eh, it's probably not that bad compared to the other high end PC brands. But it's still there. Desktops are Apple Taxed to hell and back.

Not just hating here either. I've owned numerous Apple machines, and still use a Macbook (with Ubuntu).

If that's the case, then why haven't other PC manufacturers come in and swept that market from them? People still buy iMacs and MacBooks in droves and they gladly pay those costs. If there was nothing more than an arbitrary Apple Tax (instead of something more real like R&D costs, build costs, etc.) then it should be easy for a company to ape what Apple has done, charge slightly less, and completely remove them from the market. They haven't and they won't for precisely the fact that it's not just an arbitrary markup.

I'm sure that people are well aware that Chinese knockoffs do exist and that they are stereotypically of lesser quality than it's authentic counterpart. I think the only thought process going on for most people thinking is overpriced is the fact that Apple is in the name. On computers they'd be wholly correct. On phones it's debatable. On watches they might be worth it depending on your usage. But that's the best case scenario for Apple, your usage might necessitate that quality. By and large people don't need that kind of quality because they'll never come close to that usage.

In that respect many apple products are very overpriced for many people.

It's not only subjectively overpriced, it is overpriced, objectively, as far as the BOM is concerned. What Apple does is to compromise on the most expensive core hardware but make it up on by having (1) a complete and latest set of ancillary hardware (e.g. sensors, connections, etc.) and (2) great software. Ultimately (1) and (2) are things that don't cost that much. They choose to spend the least to get the most bang, and not everybody has the sense to do that. Most other manufacturers go for the complete opposite.

Not sure what you consider "core hardware" but iPads and iPhones have the best cpus/gpus, among the best (if not the best) displays, and among the best (if not the best) cameras.

I also would not say that "great software" does not cost that much. It costs Apple billions of dollars annually to create that software.

Displays is the easiest point to argue there. It's subjective, of course, but flagship Android phones have had spectacular (and at the bare minimum, competitive) displays for a couple of generations now.

True, but Android flagships typically aren't much less expensive than iPhones...

I don't object on consumer price. Most IoT stuff is priced at "can't possibly be any good".

My concern with requiring a specific hardware solution was that it leaves you utterly at the mercy of Apple; if you get rejected by their program (which they do quite capriciously with apps) then you're completely sunk by having committed to an Apple-specific expense. Allowing a software security solution lets people justify a good product by appealing to Apple without being quite as beholden to their opaque decision making.

This is most assuredly not what it costs for a quality product, but it is what they can charge for a quality product given no competitors in that tier. Plus, signaling, etc.

Using high level encryption standards seemed to be the sticking point in early devices. Standard chips ran the authentication protocols too slowly.

http://appleinsider.com/articles/15/07/22/homekit-market-hel...

However, getting the fundamentals correct definitely includes using high level encryption protocols, and we've seen what happens with devices that do not do so.