With Mac sales plummeting will Apple reduce prices?

[DHagan4755]

With Macs sales reportedly down 40%, and the supposed halting of M2 chip production because Apple had M2 aplenty, would Apple make the rare move of lowering its Mac pricing?

There are a couple of ways Apple could approach this.

First, with a new-to-the-lineup 15.5" MacBook Air imminent, there has been speculation on what this model will cost. Will Apple adopt the same approach as the iPad Pro pricing; i.e. $200 more for the larger display?

In the past, Apple's version of "lowering prices" is a play on value. With that in mind, Apple could discontinue the MacBook Air M1, slot the existing entry-level MacBook Air M2 in its place at $999, the new 15" MacBook Air 256GB SSD would be $1,199.

Likewise, the 13" MacBook Air 512GB SSD model could be dropped to $1,299, and the 15" MacBook Air 512GB SSD would be $1,499. This is Apple essentially saying you get a bigger display for the same price. Their version of a price cut. See how this game is played?

Or Apple could instead keep the line-up as is, but instead bump the SSDs on the models. $1,199 on the entry model would net you a 512GB SSD instead of 256GB and so on. Because of the way Apple silicon works with unified memory, it's less likely that Apple bumps the RAM to a 16GB default (even though they should).

What do you guys think will happen?

 

[Serge88]

No,

they tried that in the '90 era. It was not successful. They almost went bankrupt.

 

[andrewstirling]

There may be different perceptions based on where you’re living. In the UK Apple have revised prices significantly upwards over the past 18 months so I can certainly see why sales have been poor. I’m as entrenched in the Apple
ecosystem as pretty much anyone but, the mini aside, I no longer consider the value of new macs in the uk to be reasonable / acceptable. I’m certainly upgrading at a far lower rate than I have done previously.

 

[thenewperson]

Outside the US? Sure, they got a bit dumb with prices.

In the US? Nah

 

[Apple_Robert]

Apple doesn’t have sales at their store or website. Third party retailers often offer sales.

 

[Serge88]

Mac sales are not really significant on the balance sheet. I don't think they will change the marketing strategy to sell more mac. They just have to wait for economy to recover from the recession.

 

[orionquest]

No, and nothing will happen. They might have a bad quarter but it will be blip on the radar. Release new product or updates and everyone will keep chasing those carrots.

Anywho this is a nothing burger.

 

[Nermal]

No,

they tried that in the '90 era. It was not successful. They almost went bankrupt.

90s Apple didn't have iOS as a money-maker. I suspect that Apple can afford to be a bit more "experimental" with the Mac range these days. Whether it actually happens is another matter entirely, of course!

 

[mortlocli]

..wonder if it means job cuts?

 

[HouseLannister]

Careful what you wish for. In 2013, Apple dropped the MacBook Air price $100 rather than making it retina like all their other offerings. Do you want it to be good or do you want it to be cheap?

Oh, and that 10 year old Air was $1099 for a 13”. $100 price hike in 10 years doesn’t seem too bad.

 

[Analog Kid]

Business cycles are cyclical, and chasing them is for chumps.

Leaving aside all the stage shows, Jobs’ most important contribution to the revival of Apple was insisting that products be priced at what they’re worth and making sure Apple built enough of a nest egg that they could not only weather the lean times without making self destructive compromises, but accelerate out of them by taking advantage of better supplier arrangements and employee morale.

 

[MacProFCP]

With Macs sales reportedly down 40%, and the supposed halting of M2 chip production because Apple had M2 aplenty, would Apple make the rare move of lowering its Mac pricing?

There are a couple of ways Apple could approach this.

First, with a new-to-the-lineup 15.5" MacBook Air imminent, there has been speculation on what this model will cost. Will Apple adopt the same approach as the iPad Pro pricing; i.e. $200 more for the larger display?

In the past, Apple's version of "lowering prices" is a play on value. With that in mind, Apple could discontinue the MacBook Air M1, slot the existing entry-level MacBook Air M2 in its place at $999, the new 15" MacBook Air 256GB SSD would be $1,199.

Likewise, the 13" MacBook Air 512GB SSD model could be dropped to $1,299, and the 15" MacBook Air 512GB SSD would be $1,499. This is Apple essentially saying you get a bigger display for the same price. Their version of a price cut. See how this game is played?

Or Apple could instead keep the line-up as is, but instead bump the SSDs on the models. $1,199 on the entry model would net you a 512GB SSD instead of 256GB and so on. Because of the way Apple silicon works with unified memory, it's less likely that Apple bumps the RAM to a 16GB default (even though they should).

What do you guys think will happen?

This isn’t the first time that Apple has faced this issue.

1. The industry is suffering a downturn and while Apple declines are high, it is not specifically an Apple problem, as much as an industry problem.

2. Apple has put a lot into the Mac line with the M1 lineup. It seems that while M2 is a lackluster upgrade, the M3, with 3NM processors, will be a huge improvement.

3. Apple doesn’t really care much about what their customers say they want. They care about what they think people will buy and then charge the highest price they feel they can get for it. This isn’t Steve Jobs era, where great products was the point. The point is now good enough products to sell; and it’s working. Tim has made Apple shareholders more money than Steve ever dreamt of by focusing on selling rather than innovating. Of course Apple has innovated greatly, but for the point of selling and less about making exciting new products and upgrades.

4. Apple is currently in a technological trough with the M2 and still not having the full lineup on Apple Silicone. I fully expect Apple to hit a home run with the M3 and an M3 Mac Pro. While I would love a new AS Mac Pro, with the current selection available, it certainly is understandable that they would wait until the benefits of a 3NM chipset for this major upgrade. Also, I think Apple may still be trying to work out a way to make a truly pro machine, meaning user upgradable, on Apple Silicone.

 

[DHagan4755]

Apple doesn’t have sales at their store or website. Third party retailers often offer sales.

You're right. However I wasn't talking about Apple having a sale. I was talking about Apple lowering prices. There's a difference. Apple has lowered prices on their products in the past — the original MacBook Air debuted in 2008 for $1,799. Lest you forget!

 

[DHagan4755]

This isn’t the first time that Apple has faced this issue.

That point is very true. But the pandemic spawned a massive buying spree as people worked & learned from home. M1 was a massive upgrade in performance and battery life. M2 is a furtherance of the performance of M1 but not by the same leap as M1 was from Intel. Nonetheless the super cycle upgrade created a void because a lot of people are all set for now. M3 looks very promising, yet this won't probably be enough.

Apple does care what customers want. If they didn't Apple wouldn't have listened to customers who wanted HDMI, SD card slot, and the MagSafe charger. Everyone that had an older MacBook with MagSafe always went out of their way to comment, "I don't know why Apple ditched MagSafe, good to see they finally brought it back." If Apple didn't care, Apple would have kept the MacBook Pro wafer thin & let it run hot.

Everyone likes to look back fondly at the Steve Jobs' era but conveniently forgets about the QC issues of those "great products." The peeling paint & bad hinges on the Titanium PowerBook G4, Antenna Gate on the iPhone 4, the yellow tinted displays on MacBook Pros, the failing graphics cards in MacBook Pros, the hockey puck mouse, Mobile Me, and the list goes on.

 

[GMShadow]

Those estimates by 'analysts' are always inaccurate. Never trust data you didn't pay for.

Sales spiked due to lockdowns and such, and Apple also had a supercycle due to the M1 Pros. Now, they'll let things settle and figure out where the new baseline is. Reacting solely based off a few quarters is how companies go broke.

 

[KaliYoni]

Mac sales are not really significant on the balance sheet.

It's true Mac sales aren't a massive presence in Apple's revenues but balance sheets show assets and liabilities. Cash flows, sales, and other types of income all appear elsewhere on financial statements.

 

[KaliYoni]

Apple has lowered prices on their products in the past — the original MacBook Air debuted in 2008 for $1,799.

Don't forget, prices from previous years need to be adjusted for inflation.

(here is one place to do so: https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator )

Now, I don't think, given Apple's current corporate strategy and brand positioning, Apple would "reduce prices". If, in the face of a prolonged global recession, Apple did decide to tactically make its products a better value temporarily for buyers, I think it would keep its premium pricing intact and give out long trial periods for various Apple online services or include Apple Store gift cards with new hardware. That way buyers do get more for their dollar/euro/yuan/et al. but Apple does not get subsequent buyers anchored on non-premium prices.

 

[DHagan4755]

Don't forget, prices from previous years need to be adjusted for inflation.

(here is one place to do so: https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator )

Good point although Apple dropped the price of the MacBook Air in 2009 by $300.

Apple Updates MacBook Air and Drops Price to $1499

Today at WWDC, Apple announced major changes to their laptop line. Amongst these, Apple has updated the MacBook Air and discounted the entry level...

www.macrumors.com

At the Back to the Mac event in 2010, Apple further reduced the price of the 13" MacBook Air with a redesign to $1,299.

 

[DHagan4755]

The 11" MacBook Air was introduced in 2010 at $999. For $200 more, you the larger 13" model.

Apple Announces New 13.3-Inch and 11.6-Inch MacBook Air Models with Flash Storage

At the close of Apple's Back to the Mac event today, Steve Jobs announced two new MacBook Air models feature 13.3-inch and 11.6-inch displays. ...

www.macrumors.com

 

[MacProFCP]

That point is very true. But the pandemic spawned a massive buying spree as people worked & learned from home. M1 was a massive upgrade in performance and battery life. M2 is a furtherance of the performance of M1 but not by the same leap as M1 was from Intel. Nonetheless the super cycle upgrade created a void because a lot of people are all set for now. M3 looks very promising, yet this won't probably be enough.

Apple does care what customers want. If they didn't Apple wouldn't have listened to customers who wanted HDMI, SD card slot, and the MagSafe charger. Everyone that had an older MacBook with MagSafe always went out of their way to comment, "I don't know why Apple ditched MagSafe, good to see they finally brought it back." If Apple didn't care, Apple would have kept the MacBook Pro wafer thin & let it run hot.

Everyone likes to look back fondly at the Steve Jobs' era but conveniently forgets about the QC issues of those "great products." The peeling paint & bad hinges on the Titanium PowerBook G4, Antenna Gate on the iPhone 4, the yellow tinted displays on MacBook Pros, the failing graphics cards in MacBook Pros, the hockey puck mouse, Mobile Me, and the list goes on.

I agree with everything you said. Steve was far from perfect and made many many mistakes, and, I’m referring to Steve 2.0. My observation is that Steve was a product guy who focused on putting together the best products he could envision. That doesn’t exclude or downplay his errors. Tim is an operations guy and a financial genius. Therefore, while Tim’s primary focus is using products to earn profits, Steve’s approach was that so long as Apple kept putting out insanely great products, the profits were sure to follow.

I have deep respect for both men and each has their successes and failures. Personally, I relate more to Steve’s approach because I believe in always doing the best possible, however, I also don’t think there is a better person out there, capable of running Apple, more than Tim.

 

[theluggage]

they tried that in the '90 era. It was not successful. They almost went bankrupt.

I think it is closer to "they tried that in the 90s because they were almost bankrupt.

You're talking about the decade when the Wintel monopoly peaked, PCs got technically advanced enough to actually compete with Macs at graphics and DTP, and virtually every other non-Wintel platform went extinct. Apple did pretty well to survive it at all.

...but, yeah, cheaper Macs & more generous base specs would be welcome, but this "plunge" in Mac sales seems to be mainly industry-wide "reversion to the mean" after a sales boom during the pandemic, plus the end of a "boom" for Apple after the launch of the M1 series and a dip caused by their failure to launch new MBPs last October (probably knock-on from the pandemic and general chip supply woes).

 

[SalisburySam]

What do you guys think will happen?

My guess is that the only thing that will be reduced is production quantities, with the resulting cost savings. Apple’s supply chain has demonstrated its ability to adjust downward quickly and effectively. Unlike say Tesla, Apple is not trying to push sales of every item it can create but reacts more to the number actually being sold without meaningful incentives. Yeah, I know, buying some devices gets you some free time on AppleTV+, but I don’t see that as “meaningful” like a 25% price reduction would be. And I don’t envision that happening. But would like to be wrong here.

 

[Lounge vibes 05]

Yes, but not in the way people think.
I could see Apple drop the M1 Air, bring the M2 Air (8/256) down to $1099 and start the new 15 Air at $1299.
I Could also see the iMac dropped down to $1099 for 8/256, just like the Mac mini M2 dropped in price.
But that's about it.
People expecting an M3 Air with 16Gb of RAM and 512GB of storage at $999 from Apple.... Its not happening.

 

[zachlegomaniac]

Do they even care about Mac sales other than out of obligation to keep things greased for their other devices - especially the iPhone? Real question.

If not, then I can’t see why they would lower prices.

 

[stradify]

If Apple has an oversupply of a product then Best Buy, Costco, etc can offload the surplus at reduced prices. Just a couple of weeks ago Costco was selling the base mac mini pro for $1099. I've not seen Apple lower their prices, in store or on the web, and expect that policy will continue.