Guess who is on sale these days? If you answered anything made by Samsung, you’re close to a spot on analysis. Actually, as the world drifts into recession here and there, everything is on sale, including Apple.
Wait! What? How is that possible? Let’s say you just visited the Apple Store in the mall. What was on sale? Uh, probably nothing. Yet, Apple has iPhones on sale with a trade in, but that’s not the norm. Check out third party retailers. Apple is on sale.
Technology writers, market analysts, and anti-Apple critics had a pleasurable few months when iPhone XS, iPhone XS Max, and iPhone XR hit the streets with seemingly gargantuan prices; relative to last year, and relative to the original iPhone’s $599 price tag in 2007. The meme was basic. “Apple is pricing itself out of business.”
Proof of that meme was Apple missing its revenue guidance in the holiday shopping quarter. That’s only happened twice in the 21st century. So, where are all these Apple product sales?
Everywhere. Everywhere except at Apple.
As a premium brand with qualities of aspiration, Apple Stores don’t go into sales mode often; bundling is about as good as it gets, despite an occasional refurbished sale on Mac, iPhone, and iPad. No, where Apple goes on sale is with other retailers. Amazon, Best Buy, Target, cellphone companies, and other online stores.
Every week I see new ads for iPhones bundled and packaged from various cellphone companies. Every week I see news articles on Amazon cutting Mac and iPad prices.
Apple is on sale. Why?
First, let’s lay some blame on various and sundry economies. Think ‘the R word.’ Yes, recession is rearing an ugly head here and there, and softening economies mean softening sales– even for Apple.
Second, let’s lather some blame on gadget fatigue. There was a time when every new iPhone was a dramatic improvement over last year’s model, and since cellphone companies helped subsidize many upgrades, Apple was the beneficiary. Except for the occasional bundled deal, those days are gone. Customers just don’t want or need to upgrade as frequently as in years past.
Third, let’s put some blame on the competition. There was a time when Apple and Samsung were the smartphone industry leaders. They still are– especially where it counts; revenue and profits– but competitors from China often have higher hardware specifications for less money and that impacts Apple and Samsung sales.
Finally, Apple has realized there is value in having a billion customers, hence the recent focus on adding accessories and Services. Yes, Apple is a hardware company and is not transitioning to software or services, but the iPhone maker knows that a growing customer base that spends money on Apple Music, Apple Pay, AirPods, Apple TV, Watch, App Stores, AppleCare, and everything else that gets lumped into Services is a good way to keep printing money.
Apple on sale means, well, more hardware sales, and that means more software and Services sales. It took Apple a long time to figure that out.