Apple signals buyers market?

Last night I was reading my latest MacMall catalog.  I was struck by the discounts being offered on new Intel Duo Core based Macs.  The MacBook Pro was being shown with $150 rebate and a free printer.  I checked CDW this morning and they also had some rebates running though it wasn't clear if theirs were as good as MacMall's.

Also last night I also caught this article, "Dell whacks prices on select notebooks, desktops."

The Round Rock, Texas-based PC maker is selling an Inspiron E1505 notebook with an Intel T2300 Core Duo processor, 1GB of memory, an 80GB drive, a 15.4-inch screen and a DVD burner for $699 on Monday, down from the usual price of $1,234.

This morning I got an iChat from Jeff Powell over at Nosce Ti Ipsum alerting me to Apple's new computer marketing campaign.  As Jeff pointed out this is the first time since 2001 that Apple has had ads like this.

We know that Dell has lost some market share to HP and others by being less aggressive on pricing. Obviously that's what is behind their actions.  Usually when Apple announces new products, it holds prices very steady for the first three or four months.

If you're a veteran Apple watcher, you know that often you can pick up signs of what Apple is about to do it you closely watch their large mail order houses which they use to clean out inventory and move product when no one else can move it.

There are only two possibilities as to why Apple discounts are showing up at the mail order houses.  The first is that the current Intel products aren't moving as well as expected.  The second is that new products are coming.  Since this is a new world for Apple perhaps the product cycle is condensed and speed bumps will come at a faster clip which could explain the early pricing changes.

Whatever it is, it appears to be good news for computer purchasers.  I also saw some discounts on Sony laptops so there is definitely some pricing pressure in the market.

Apple might have to resort to more than just a new advertising campaign to sell Macs to the world of Windows users.  I'd like to see Apple hire 1,000 sales reps and give each of them five iMac seed units and send them forth to change the minds of computer users outside the major metropolitan areas.

We had great success with taking Apple products on the road to the blue collar heartland in the mid-nineties until Apple decided that it wasn't cost effective.  We would go into a city, partner with the local resellers, and have presentations by key software companies.  The people loved having Apple come to town.  Sometimes we would draw a crowd of three hundred people.

Hey perhaps, Apple can offer low interest loans to small businesses that want to migrate to the Mac platform.  They certainly got the cash to do it.  Dell and other vendors have used financing as a tool for years. Apple has rarely been able to use it effectively.

Comments

[Michael Mendell]

First off, component prices have dropped, that's why the lower prices..not new models are coming of the models they just introduced or they are having a hard time selling them. This goes for the Dell as well as Apple.

Second, Macmall always gives rebates and free printers..thats how they get people to buy from them and not the Apple Store. The rebate of $150 may seem like a lot, but it nothing on a high priced unit like the Macbook Pro which retails for $2000-$2700.

[ocracokewaves]

Wow, I guess Dell components dropped a lot more than Apple components.

MacMall doesn't always give rebates. I've been a customer for years. They give rebates on Apple stuff when Apple give them money to move stuff.

I've seen the process work from the inside and that's the way it works.

[DrMax]

Here's the secret to Apple selling tons of dual boot MacIntels: Create full proof Windows recovery software that lives on OSX. Bear with me, wouldn't a program that repaired Windows and removed spyware and adware (and resided on another OS on the same machine) be an invaluable tool, especially for businesses? If Apple gave users a reliable way to keep Windows bootable and functioning, who would buy a single Windows OS machine again?

[jimp]

Macmall hasn't always given me a cash rebate, but they always give me tons of stuff for free if I buy...when I bought an ipod at Christmas, when they were hard to get, they still gave me free engraving, a free case, and free fm transmitter..all w/rebates.

I don't think apple gave them money to move it...they were lucky they got what they ordered from apple...as they were backordered a few weeks.

Dell has had to reduce their margins on top of reducing prices when components' prices go down...if you read their earnings report you'd know that.

[Benton]

SonyStyle
http://www.firstusa.com/cgi-bin/webc...nt& mkid=6RS3
DisneyStyle
http://disney.go.com/visa/today/index.html?CELL=6RGY19
AppleStyle is nowhere to be found!???

[me@nowhere.com]

Amazon has had rebates on the Intel Macs since the first day they sold them. Apples sales hve been jsut fine if you had bothered to read them.

[ocracokewaves]

It never ceases to amaze me that there is never any bad news in the Apple world. Then mantra that Apple sales are good, just doesn't stack up with the evidence.

You might want to check out my post, "Apple's Rainbow Reality."

http://viewfromthemountain.typepad.com/applepeels/2006/04/rainbow_reality.html

"Now Q2 is a tough quarter in the computer business, but Apple introduced its first Intel based Powerbook, Mac mini, and iMacs in the quarter. Yet Apple only managed to grow their computer sales 42,000 units from Q2 of last year or a meager 3.9%."

"Dell however managed to grow their unit sales 10.2% or approximately 875,382 units if you use IDC numbers."

When you're Apple and you're focused on the consumer market, and refresh all your consumer computers but the iBook, you should manage more than 42,000 units just from the imagined halo effect.

I don't think there are many consumers out there waiting for Photoshop to be optimized.

No matter what you think about the market share argument, most people believe ultimately Apple has to do better to survive. Growing just 42,000 units just doesn't cut it.

Apple's still basically stuck where it has been for years at about 2% global market share. Last fiscal year they sold 4.5M units. So far they've sold 53% in units of what they sold last year.

Just to match their last year's growth Apple needs to get to 5.8 million units which means that need to sell 1.7M units each of the next two quarters which is a daunting challenge considering they only sold 1.11M units last quarter.

If you don't believe in the market share argument, check out John Gruber's post of a few years ago. It's a well reasoned argument.

http://daringfireball.net/2003/07/market_share

I personally like the argument that Apple should be the Acura or Lexus of the computer world, but service and quality need to go up a few levels for that to work.

If you would like to see some historical info on market share check this out.

http://www.pegasus3d.com/total_share.html

Just don't try to fool yourself into thinking Apple's computer sales are great.