While we generally don’t really report on Apple rumours (for obvious reasons) I thought the one currently making its rounds across the countless copying/pasting Apple websites is pretty interesting discussion material. According to the ominpresent and omnipotent “people familiar with the matter”, as told by AppleInsider, Apple is preparing to compete on… Price.
The AppleInsider article states that due to the pressure felt by the success of netbooks, Apple is preparing to lower the prices on its most popular offerings in the computer market – the iMac and the MacBook. Supposedly, this move is a temporary measure to bridge the gap between now, and the time Apple’s tablet-like device arrives that is supposed to compete with netbooks. The omnipresent people also say that Apple has no interest in entering the actual netbook market with an Apple netbook.
Profit-wise, netbooks pose little threat to Apple. Companies shipping netbooks aren’t making huge profits on them, but they are increasing their shares of the computer market, at the expense of Cupertino. For instance, even though Acer lowered its netbook sales expectations for the rest of this year, they did see unit shipment growth higher than 50%, all thanks to the Aspire One series.
Whether the rumour has any merit or not, this an interesting point of discussion. Apple has always stated that it is not willing to suffer margins for marketshare growth, so if they were to lower their prices to compete with netbooks, it would constitute a major policy change for Apple.
This brings us to the next question: is this actually a good idea? Well, for us customers, it’s of course a really good idea. The goal of a customer is to pay as little money for as many value as possible, while the goal of a company is to give you as little value for as much money as possible. As such, this rumoured moved would be a win for consumers.
However, for Apple, it could hurt the bottom line. It would be a massive gamble, because what if, despite lowered prices, unit sales would not rise? If that were to happen, the company’s bottom line would suffer, and shareholders would start throwing fits.
Let me reiterate that this is all a rumour, and from AppleInsider no less; I’m just posting this as a way to get a discussion started. Is lowering prices a good strategy for Apple? If so, why? If not, why not? Discuss!
Why would Apple do this? They are selling more now than ever. You only lower prices when you aren’t selling enough. Someone needs to learn some economics.