I can’t speak for markdowns at Tiffany’s, Rolex watch discounts, or Rolls Royce sales, but sales are everywhere. Lexus has them. JCPenny and Sears and Macy’s have them all the time. Why don’t we see big “Sale” signs on the windows of Apple Stores in the Mall?
Value vs. Premium
Sales are a time honored way to clear out merchandize, to make way for new products, and to reduce inventory. Every retailer I can think of has regular sales; maybe only a few a year (like Lexus or expensive car dealers), but sales bring in foot traffic, and that leads to revenue and profit.
What goes on with Apple products that you don’t see sales at Apple Stores? Retailers like Best Buy or Target and others will have sales on Apple products, but not the Apple Store. Why not? It’s value vs. premium. As a premium brand, Apple stays above the frayed edges of retail discounters because customers remain loyal to both the brand and the store. I won’t buy an Apple product at Best Buy or Target because I know that their discounts are simply to move inventory, and I prefer the handholding I get at an Apple Store.
What does Apple do with inventory that needs to be moved soon after new models are introduced?
Yes, every retailer has products that stock up in inventory and just don’t move as quickly as expected or planned. That includes Apple. I’ve seen some Apple products on eBay, Amazon, and other online sites– with discounts. Apple even has its own discount section on the Apple Store for refurbished products. For customers who want to save a few hundred dollars and still get a new machine with full warranty, that’s a good place to visit.
Apple has what I call hidden sales. This often happens during back-to-school season where you can buy a Mac and get something extra as an incentive. A Mac and an iPad at a reduced price happens occasionally.
The $1,000 iPhone
The Mac has a wide range of prices and when they go on sale, it’s usually at an authorized retailer, and not at the Apple Store. The Mac mini starts at $499. The iPad starts at $329. That means Apple pays more than just lip service to the value end of the product spectrum, but there is talk on the streets that iPhone 8– due later this summer or early fall– could top the $1,000 price barrier.
$1,000. For an iPhone? We’re almost there. A 256GB iPhone 7 Plus hits $969, so unless Apple shuffles the prices on new iPhones, $1,000 would be an easy barrier to break.
Does anyone care? I don’t think so. A MacBook Air– 7-year old design and more than last year’s technology– starts at $999. The bigger iPad Pro is $1,129 with cellular, just $170 less than an entry-level MacBook.
What you won’t see on the big glass windows at an Apple Store in the Mall is a sign that says sale. Adrian Kingsley-Hughes thinks Apple might bundle a pair of AirPods– normally $169– with the high end iPhone 8 model. That’s a discount of sorts, but not technically a sale. Apple would need to ramp up manufacturing because the AirPods are still six weeks on backorder.
Apple doesn’t have the traditional sale because it doesn’t need to. The brand is just too premium for a typical product sale, and the company has more than enough stores in the retail chain to help out when inventory needs to be moved to make way for new products.
Even the much maligned Mac Pro, which starts at $2,999, and is all but end-of-life thanks to Apple’s management miscues, hasn’t been discounted in price. Instead, the Mac Pro– for the same $2,999 as less models– comes with a faster Intel Xeon CPU, 6-cores no less, and faster GPUs, but with the same anemic RAM. But it doesn’t take much effort to get the Mac Pro configured up to a dollar short of $7,000. But there’s no sale.
Apple’s customers are well trained. Products on sale happen, but just not at the Apple Store and not in the traditional way.