Have you noticed that much of Apple-ware is on sale these days? No, not at the Apple retail stores or Apple Store online, but in many of the third party retail outlets– Amazon and Best Buy are two big examples. What’s going on?
It seems to me that Apple figured out the obvious. The customer base needs to grow and one way to do that is to sell less expensive products. Yet, Apple needs to remain a premium brand so the company can command those higher-than-industry standard gross margins.
Seems like a quandary, no? What should Apple do?
Apple did what it should do. Last year the company raised prices on a whole bunch of new products; from MacBook Air to Mac mini, iMac Pro, both new iPad Pro models, and all the new iPhones, just to mention a few.
Wait. That’s not quite right. Apple didn’t actually raise prices on older products; instead, new products came with higher price tags. Then, almost as if someone at Apple pulled a toggle switch last year, all those products showed up here and there on sales with discounted prices.
Amazon, Best Buy, and a whole bunch of cellphone companies either discounted Apple-ware or bundled them with something that felt like a discount.
Yeah, Apple was on sale and remains on sale.
Apple needs to increase the customer base because both Wearables (Watch, AirPods, Beats headphones, Watch accessories, et al) and Services (AppleCare, Apps, service, Apple Music, Apple Pay, iTunes, et al) are the fastest growing categories and since Apple is still a hardware company, they need, well, more customers.
That’s why so much of Apple is on sale at Amazon and Best Buy and cellphone carriers and other places. It’s also why Apple raised prices, because it’s better to discount a high price than discount a low price.
Math. And Tera’s version of Economics 101 Apple style.