[Satchmo]

In light of the just announced profits (and warchest), wouldn't it be nice if Apple were to cut prices and really go after marketshare?
Now I'm not saying to compete against no name PC machines, but a nice 10% cut across the board would be nice.
A $1999 15" PB would be $1799 and an iBook 14" would be $1350 vs the current $1500.

Afterall, if they're not going to upgrade the features, drop the price.

[bb823]

I agree that they charge a premium, however, I got hooked up pretty nicely when I bought my 12" PB. Here's what happened...My university academic store had a deal where if you bought a 12" PB SD and an academically priced AppleCare plan, you would get either $160 towards an ipod, or the total cost of the PB + AppleCare. So I put it towards the AppleCare. Then Apple had a GoSave $100 rebate from May-June. So when all was done, I got a PB, plus AppleCare for -$20. Apple cut prices for me!

[Brad]

Originally Posted by Satchmo In light of the just announced profits (and warchest), wouldn't it be nice if Apple were to cut prices and really go after marketshare?

How is this any different from the past few years? Why should Apple change the formula (and potentially lose all those great profits) when things are obviously working so well? What about investors that expect Apple to keep the same margin it's had for so many years?

10% cut off the overall price is a HUGE cut in profits. Apple has roughly an overall 30% margin. Cutting prices to 10% would mean reducing margins by a third. There's no way a measly 10% price cut can make up enough by added volume alone.

Just because Apple is doing well doesn't mean it can afford to start slashing prices.

[Satchmo]

Originally Posted by Brad How is this any different from the past few years? Why should Apple change the formula (and potentially lose all those great profits) when things are obviously working so well? What about investors that expect Apple to keep the same margin it's had for so many years? 10% cut off the overall price is a HUGE cut in profits. Apple has roughly an overall 30% margin. Cutting prices to 10% would mean reducing margins by a third. There's no way a measly 10% price cut can make up enough by added volume alone. Just because Apple is doing well doesn't mean it can afford to start slashing prices.

Well I may have been a bit excessive with a 10% off.

But can you simply expect sales to continue as they have?
There's no denying the iPod frenzy is dying down and next quarter's financial results will be interesting with the Intel transition fully in effect.

Plus the big difference between today and years gone by is that Apple actually has the mindshare of people (thanks to the iPod). A few people I know would like to switch, but are still spooked when the cost of a PB is still 20-30% higher than a more featured PC laptop (granted running XP).

[Brad]

Originally Posted by Sachmo But can you simply expect sales to continue as they have?

Sure. Why not?

Originally Posted by Satchmo There's no denying the iPod frenzy is dying down

Actually, it looks like the iPod is surpassing everyone's expectations here. Unit sales have still been on the rise for this past quarter.

Originally Posted by Satchmo and next quarter's financial results will be interesting with the Intel transition fully in effect.

Huh? Apple won't even start selling any Intel units until next year, most likely until next summer. The transition won't be "fully in effect" until this time next year.

Originally Posted by Satchmo Plus the big difference between today and years gone by is that Apple actually has the mindshare of people (thanks to the iPod). A few people I know would like to switch, but are still spooked when the cost of a PB is still 20-30% higher than a more featured PC laptop (granted running XP).

Same old story. This year it's people being enticed my the iPod. A couple years ago it was Mac OS X. It's always something. Apple's never going to be able to beat or match wholesale PC retailers and piecemeal shops. It's a niche market and niche markets are always more expensive.

[torifile]

Satchmo, it bears restating that iPod sales were STILL up over the previous quarter. They sold more iPods in a typically dead quarter than they did in the Xmas season! There's no stopping the iPod train, it seems. While it *feels* like the iPod is slowing down, it's really not. Hell, my dad got an iPod for Father's Day! He's not your typical tech user by any stretch. There are bunches of other people like that out there. Add to that the people who are ready for a new iPod and you've got a nice long stream of revenue.

[NaMo4184]

Apple doesn't have to cut across the entire line. If they just cut the power macs that would be good. as they aren't selling well and the profit margin at that price range is pretty fat anyway.

[sunrain]

Seems to me as though Apple has been doing a good job of cutting prices when possible (or beneficial). We've seen it with the Shuffle, Displays, iMacs, etc.. I think it's a bit ridiculous to expect a price drop just because they're coming off of a good quarter.

[rasmits]

"Release a sub-$500 computer and market share will sky rocket! People will devour it!"
"Advertise OS X and people will ditch Windows immediately."
"Lower prices and sales will blow through the roof!"

It's all the same.

[MCQ]

Originally Posted by Brad Huh? Apple won't even start selling any Intel units until next year, most likely until next summer. The transition won't be "fully in effect" until this time next year.

I think Satchmo meant to say "The negative effects (if any) of the announed transition to Intel should show this quarter, since this is the first full quarter post-announcement."

Personally, I think it's a complete non factor. I'd expect another uptick overall due to large higher ed sales, if the college kids start buying Macs to go along with their iPods (of which it seems 50% of college kids own).

[intlplby]

most consumers just dont know about the transition

[Benton]

Prices are not reduced when demand remains strong.

[Hobbes]

I would not be surprised if one of the major factors behind transitioning to Intel chips is to take advantage of Intel's deep high-volume discounts, allowing for the *option* of competing in areas where Apple currently can't productively compete, such as the mid-level PC tower market and the sub-$500 market. The latter seems unlikely, as it's so insanely cut-throat and low-margin... but the former IMO is very likely indeed.

It's very important for Apple to continue its momentum in Mac sales, and build marketshare, however slowly. Competitive pricing (which Apple is currently only able to do for some of its models, in a rather sporadic manner) is a big deal.

[Amadeus]

At least currently Apple has been giving us more in specifications, but at the same price. They did lower prices on the displays. So one can only hope that another round of price cuts would occur.

[Satchmo]

Originally Posted by intlplby most consumers just dont know about the transition

Most consumers don't know about Mac period.

And yes, I was referring to transition period where people who know about Mac, and are about to buy a Mac, may sit on the fence til the transition is complete. What better way to spur sales but a slight price cut along with a speed bump.

Making the switch is much easier if Mac prices are within $100-$200 of their PC counterparts as opposed to the often $400-$500 spread. Of course I may be wrong and sales next quarter may still be up. I just think the opportunity presents itself for greater marketshare.
I think there are those who simply prefer Mac prices remain high because of an elitist attitude.

[_Ω_]

Originally Posted by Satchmo I think there are those who simply prefer Mac prices remain high because of an elitist attitude.

I have to have someone to make fun of

[Wraven]

Originally Posted by Hobbes I would not be surprised if one of the major factors behind transitioning to Intel chips is to take advantage of Intel's deep high-volume discounts, allowing for the *option* of competing in areas where Apple currently can't productively compete, such as the mid-level PC tower market and the sub-$500 market. The latter seems unlikely, as it's so insanely cut-throat and low-margin... but the former IMO is very likely indeed. It's very important for Apple to continue its momentum in Mac sales, and build marketshare, however slowly. Competitive pricing (which Apple is currently only able to do for some of its models, in a rather sporadic manner) is a big deal.

Yeah, I read that on CNet or some other major technology web site as well. I think the Article was called "The Real Reason Behind the Switch" or something like that. *COUGH* PLAGIARISM *COUGH*.

J/K - I know you probably didn't mean to do it.