Hey, have you heard the news? Apple really, really wants customers to upgrade to new products and buy new gear. Well, it’s either that or Amazon’s CEO really hates Apple’s CEO. It could be either. Or, both.
Ever since iPhone XR hit the streets last year it seems as if Apple is on sale. First, the company raised prices on almost everything new– iPhone, iPad, Mac mini, MacBook Air, iMac, Watch, et al. Then, followed that up with discounts and promotions which turned into sale prices. What does it mean?
The Apple Paradox
Long before we became technology hounds, Nathan and I worked in retail. You know, stores that raise prices so they can discount prices later. That methodology works because lower prices stimulate demand. Apple’s executives seemed to know that technology gadget sales were approaching a saturation point so they raised retail prices, only to allow for additional discounts and promotions and bundles and sales that would, well, sell more gear.
Think of this as Apple’s ‘price increase‘ and ‘on sale‘ paradox.
The company raised prices and then allowed sales to help stimulate buyers to, well, buy more gear? It’s retail math. Lower prices– even relative to already higher prices– seems to produce more sales.
It’s either that, or Amazon CEO Jeff Bezos hates Apple and Apple CEO Tim Cook. It wasn’t long ago that you had trouble finding Apple products on Amazon, but the executives kissed and made up (I would loved to have been a fly on the wall for those discussions) and online retail giant seems to sell everything with an Apple logo on it at a big discount.
Apple Stores do not discount. No sales. Promotions and bundles, maybe. But no sales. Amazon sells everything at discount prices. Look at Best Buy? Same thing with the big box discount stores. Everything Apple seems to be on sale these days and sits in stark contrast to just over a year ago when Apple could extract higher prices from a loyal customer base.
Services is the new AAPL darling of Wall Street and that means Apple makes more money– not just when it sells more hardware– but also when customers buy more subscription applications, more music and TV shows and movies, and more accessories.
Did Apple inflate hardware prices last year just so it could issue discounts, promotions, bundles, and sale prices this year?
It sure seems like it, right?