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  • Tuesday, May 21, 2013

Apple Product Price Drops: Spirit Of Holidays Or Sign Of Bad Times To Come?

Wednesday, December 19, 2012 | Kate MacKenzie Posted In News and Comment

AppleThere are a number of disturbing trends taking place around Apple. The stock has dropped, but I think that’s caused more by enormous profit taking than any fundamental issue with Apple.

Or, is it? What would be the signs of impending problems with Apple’s cache? If Apple fails to meet their own financial projections, that would be a sign, right? Anything else? Yes.

Run For The Hills!

Apple’s products typically command a premium price because they’re higher quality than competing products, whether desktops, notebooks, smart phones, or tablets.

The company’s product margins are the envy of the industry. When it comes to personal computing devices, who makes more money than Apple?

Customers line up to buy the latest and greatest. New products are met with immediate back orders which test our patience.

Why is it that various Apple retailers are discounting Apple products? That’s right. Discounts. Is that a sign of the holiday shopping spirit, or a sign of changes ahead?

Walmart is selling the 16GB iPhone 5 for $127. That’s a healthy discount. Select iPads are discounted $100 (and that’s with a $30 iTunes gift card tossed in).

What’s going on? Has Apple’s supply finally met and perhaps exceeded demand? The company just launched the iPhone 5 in China. No lines. That’s partly because of problems in the past, and Apple’s new and improved reservation system.

However, they sold 2-million iPhone 5s in the first few days after launch. 2-million. That means that Apple had 2-million iPhone 5s to sell.

Supply, meet demand.

AT&T also discounted a few Apple products, including the iPad (with a two-year contract). Instead of stock market analysts touting Apple’s profitability and strong financials, many are actually lowering stock price targets (and one is less than $300).

On one hand it seems as if stock market analysts want to have it both ways.

One says Apple must have a cheaper iPhone. When the iPhone becomes heavily discounted, another analysts sees that as a disturbing sign that Apple risks losing its premium brand cache, and is becoming a purveyor of pedestrian products (what’s more pedestrian than a discounted product at Walmart?).

Are these discounts and market rumblings a sign of bad times ahead for Apple? Walmart’s discount isn’t much as a percentage of the iPhone 5′s real costs, but if this trend continues then it’s clear that Apple’s supply is exceeding demand.

Read A Related Article

  • The Apple Fire Sale: What Happens When Product Demand Doesn’t Meet Product Availability
  • Is Apple’s Stock A Good Buy? Or, Is It Time To Sell And Run For The Hills?
  • To Remain Successful, Apple Needs A Cheap iPhone, A Cheap iPad, And A Cheap Mac
  • How Apple Is Doomed If It Does Not Give Away iPhones To The Masses

From Appleville

Guess what is Almost Free: A Way For Your Mac To Customize Snooze Times For Calendar Or Reminders. Meanwhile, Tera has a few thoughts on Google, iTunes, The Napster Disaster And Cure, And Subscription Music. Do you still have some Napster music in iTunes on your Mac?

On a criminal note, do you Need Some Extra Shopping Money? Let’s Sue Apple For Racketeering! It's all the rage these days. Ron has A Few Words On Batching Photos On A Mac while Kate discusses the finer points of Dogfooding: It’s How Apple Makes Products You Want To Buy And Love To Use.

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About Kate MacKenzie

I'm a 15 year Mac user from Brooklyn, New York. I used Windows Vista for a whole year and lived to tell about it. My personal site, PixoBebo, is all about Apple.

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