Richard Gardner of CitiGroup asked Apple's Chief Financial Officer Peter Oppenheimer about the forecasts, in which Apple warned for lower revenues and margins in the coming holiday quarter. Oppenheimer said they expect margins to drop 34% over the next quarter due to four reasons. AppleInsider transcribed it like this:
"Second," Oppenheimer said, "a seasonally higher mix of iPods" will push down margins and the company also expects "Snow Leopard box sales to be less."
"Third," Oppenheimer said, the company expects to pay "significantly more air freight, while fourth, Apple anticipates having to face "higher component costs than September quarter."
Various websites around the world have now concluded that Apple is going to lower some of its prices between now and the holidays. These news sites are most likely influenced by the barrage of rumours over the past few weeks and months concerning price drops on Apple's laptops, the Mac mini, and the iMac.
However, that is not what I'm reading out of Oppenheimer's comments. In fact, what I read from it is that Apple will continue to do what it has always done: offer newer, improved models for the same prices as the old models. It has been doing this for a very long time, and it fits in perfectly with the "greater value, lower gross margins" Oppenheimer is talking about.
That's because margins can decrease even without price drops - in fact, in theory, margins could even decrease with a price increase. If your production or component costs go up, then your margins will automatically suffer. Oppenheimer even points to this very thing happening. For instance, the new iMacs might switch to the more expensive Core ix architecture from Intel, which would drive component costs up, and, consequently, push margins down. It could even be that Apple's laptops will transition to Intel's brand-new Arrandale chips, which are expected for late 2009, or early 2010.
In any case, nowhere does Apple state it is going to lower its prices. Maybe even the Mac community succumbs to the wishful thinking of lower prices for Macs - and in fact, they might arrive anyway - but Apple didn't confirm anything during the conference call.