$50 sale leaves Radio Shack with nationwide shortage of Apple's iPhone

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Comments

  • Reply 21 of 43
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by enohpI View Post


    Apple might make even more money if they use BOGO or free or almost-free pricing strategies?



    Dunno. They have to consider perceptions if they are aiming for long-term outsized margins. If the iPhone is seen as a heavily discounted item, it might reduce profits long-term.



    Let me guess, your favorite "business strategy" is: "I only lose $3.00 per unit, but I make it up on volume".
  • Reply 22 of 43
    Giving Iphones away at a ridiculous price certainly will create a shortage and a dent in Radio Shacks pocket, as be assured that Apple is not taking the hit for selling discounted Iphones.
  • Reply 23 of 43
    I tried this sale last Sunday. I was looking for 2 32 Gb models. Long story short, there were ZERO in the Hampton Roads, VA area and virtually no 16 Gbs either. Radio Slack never had any stock to sell in the first place. And from what I was told, the sale was NOT available on line. I had the regional sales guy check inventory on both of their local sales districts. None. He couldn't even order one from their "Direct to You" service (buy it in the store, it ships directly to your home...), none in stock. Then he tried to blame the whole thing on Apple not giving them enough inventory...



    I wont' bother with the rest of the saga. All this did was further confirm my previous impression that Radio Shack is a low rent useless place to shop for electronics. Except in the most extreme emergency where I need an obscure part that only they sell and I call and confirm that it it is in stock and that they will hold it for me...and hell freezes over...I won't be shopping there again.



    Nice job Radio Slack...
  • Reply 24 of 43
    Quote:
    Originally Posted by enohpI View Post


    Apple might make even more money if they use BOGO or free or almost-free pricing strategies?



    Dunno. They have to consider perceptions if they are aiming for long-term outsized margins. If the iPhone is seen as a heavily discounted item, it might reduce profits long-term.



    .. and create monstrous supply and distribution problems and holdups.



    One thing's for sure though; a BOGOF iPhone would see daily activations of close to 1 million plus.
  • Reply 25 of 43
    enohpienohpi Posts: 103member
    Quote:
    Originally Posted by newbee View Post


    Let me guess, your favorite "business strategy" is: "I only lose $3.00 per unit, but I make it up on volume".



    No, it is to make less profit per unit, but to sell many, many more units. That works with goods that have sufficient elasticity of demand.



    For some of the basics, see http://en.wikipedia.org/wiki/Pricing_strategies



    There are many choices. Apple will choose the one which yields the maximum total profit. They are good at doing that.
  • Reply 26 of 43
    asdasdasdasd Posts: 5,299member
    Quote:
    Originally Posted by enohpI View Post


    No, it is to make less profit per unit, but to sell many, many more units. That works with goods that have sufficient elasticity of demand.



    For some of the basics, see http://en.wikipedia.org/wiki/Pricing_strategies



    There are many choices. Apple will choose the one which yields the maximum total profit. They are good at doing that.



    And clearly the iPhone can come down in price. The iPod Touch 4 which is missing the retina display, and the radio card sells for buttons. Apple are probably aware of this, they are with the iPod. I bet they have three lines at the end of the year - the 3GS which will be sold for free with most plans, the iP4 which will be cheap, and the iP5 which will be the expensive one.
  • Reply 27 of 43
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by enohpI View Post


    No, it is to make less profit per unit, but to sell many, many more units. That works with goods that have sufficient elasticity of demand.



    For some of the basics, see http://en.wikipedia.org/wiki/Pricing_strategies



    There are many choices. Apple will choose the one which yields the maximum total profit. They are good at doing that.



    It seems to me that Apple has already chosen ... the one which yields the maximum total profit. ..... and what they have chosen seems to be working out rather well. For you or I, or anyone else for that matter, to suggest that they rethink their pricing strategy borders on either arrogance or stupidity, imo .... take your choice.
  • Reply 28 of 43
    Quote:
    Originally Posted by newbee View Post


    For you or I, or anyone else for that matter, to suggest that they rethink their pricing strategy borders on either arrogance or stupidity, imo .... take your choice.





    For you, or I, or anyone else for that matter, to suggest that Apple is not continuously rethinking each and every strategy, including their pricing strategy, is ... take your choice.



    And to deny that variant pricing strategies are now being employed with Apple products is to ignore reality. Lately AI has told us of experiments with free iPads, free iPhones and practically-free iPhones. They have also told us that such strategies have yielded higher volumes. I believe that this data will be noticed by other stakeholders.
  • Reply 29 of 43
    brucepbrucep Posts: 2,823member
    I SLEPT ON THIS STORY ;LAST NIGHT AND I cans now say that radio shack has almost no great products to sell amy more

    their stores always seem to have a oddball stock of useless products

    and all those little gew gaws that they use to carry and were so great to find seemed to have left the shelves of RADIO SHACK FOR EVER



    Radio Shack is turning into a directionless company selling cellphones aw/ 2 yr plans .



    Apple should buy them for their store locations alone .





    no soup for you







    9
  • Reply 30 of 43
    asdasdasdasd Posts: 5,299member
    Quote:
    Originally Posted by newbee View Post


    It seems to me that Apple has already chosen ... the one which yields the maximum total profit. ..... and what they have chosen seems to be working out rather well. For you or I, or anyone else for that matter, to suggest that they rethink their pricing strategy borders on either arrogance or stupidity, imo .... take your choice.



    You have no idea what the maximum possible profit is, they can only test that by having a cheap product and see whether price per unit is made up for by volume. As I suggested the best way to do this is not to dis-continue the 3GS this summer, and I bet they wont.



    The second counter argument is to invoke Apple's past once again, and argue against temporary profits when facing stiff competition from other platforms. Since Jobs has himself acknowledged that Apple decided to take short term profits for growth in the 90's and that was a mistake he will probably lower the relative costs of the iPhone over time. In fact they have already done that - in the first 3 months, when - clearly - sales were disappointing.



    Better to end up with 30-40% of the market with a handset giving profits of(<) $100, than 5% of the market with a handset giving profits of $300.
  • Reply 31 of 43
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by enohpI View Post


    Lately AI has told us of experiments with free iPads, free iPhones and practically-free iPhones. They have also told us that such strategies have yielded higher volumes.



    As I understand it, these "strategies" are typically initiated by retailers other than Apple. Apple themselves, other than Black Friday, Xmas or student discounts seldom, if ever, discount their merchandise ..... why would they? If you know differently, feel free to enlighten me with specifics. This "old dog" is always willing to learn "new tricks".
  • Reply 32 of 43
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by asdasd View Post


    You have no idea what the maximum possible profit is, they can only test that by having a cheap product and see whether price per unit is made up for by volume.



    Do you honestly think that Apple would ever in a million years adhere to this so called strategy .... really?

    Quote:
    Originally Posted by asdasd View Post


    .... he will probably lower the relative costs of the iPhone over time. In fact they have already done that - in the first 3 months, when - clearly - sales were disappointing.



    "Our sources indicate that iPhone will likely become the fastest selling product in Apple's history and not to mention likely among the fastest (if not the fastest) in consumer electronics," analyst Shaw Wu informed clients in a research report published Monday. "We estimate sales of about 250,000 units in two days (up from our previous view of 50,000). The previous fastest seller was iPod nano, which sold about 1 million units in about 17 days meaning, about 59,000 units per day."



    http://www.appleinsider.com/articles...n_history.html



    "Apple's (APPL) highly touted iPhone "all but sold out" its initial shipment in both Apple and AT&T (ATT) stores after just three days of sales, the companies said Monday.

    Neither Apple nor AT&T disclosed precise sales figures. Tech and telecom analysts estimated sales of 500,000 to 700,000 units of the combination phone, iPod and pocket Internet device by Sunday."

    http://www.usatoday.com/tech/wireles...one-tech_N.htm



    If these sales are "clearly disappointing" then it is obvious you and I are not even in the same book, let alone the same page. It is more likely that the amazing first weekend sales told Steve that Apple would be able to realize "economies of scale" way ahead of schedule and was therefore able to re-adjust prices to reflect that new info.
  • Reply 33 of 43
    asdasdasdasd Posts: 5,299member
    Quote:
    Originally Posted by newbee View Post


    Do you honestly think that Apple would ever in a million years adhere to this so called strategy .... really?





    "Our sources indicate that iPhone will likely become the fastest selling product in Apple's history and not to mention likely among the fastest (if not the fastest) in consumer electronics," analyst Shaw Wu informed clients in a research report published Monday. "We estimate sales of about 250,000 units in two days (up from our previous view of 50,000). The previous fastest seller was iPod nano, which sold about 1 million units in about 17 days meaning, about 59,000 units per day."



    http://www.appleinsider.com/articles...n_history.html



    "Apple's (APPL) highly touted iPhone "all but sold out" its initial shipment in both Apple and AT&T (ATT) stores after just three days of sales, the companies said Monday.

    Neither Apple nor AT&T disclosed precise sales figures. Tech and telecom analysts estimated sales of 500,000 to 700,000 units of the combination phone, iPod and pocket Internet device by Sunday."

    http://www.usatoday.com/tech/wireles...one-tech_N.htm



    If these sales are "clearly disappointing" then it is obvious you and I are not even in the same book, let alone the same page. It is more likely that the amazing first weekend sales told Steve that Apple would be able to realize "economies of scale" way ahead of schedule and was therefore able to re-adjust prices to reflect that new info.



    This deserves a re-quote:



    Quote:

    Do you honestly think that Apple would ever in a million years adhere to this so called strategy .... really?



    you mean the "so called strategy" they are using to dominate the music player market?





    The fact remains that Apple reduced it's iPhone prices. And as for what it sold - in the first year about 5% of what it sells now.



    http://blogs.law.harvard.edu/dlaroch...price-history/



    How soon we forget. The original iPhone was in two models: the 4G ist gen at $499, and the 8GB at $599. The latter was reduced to $399 ( a 40% reduction) in about 4 months due to crap follow on sales. The former was discontinued. Without that reduction, the debate here would be as refined as the Newton forum.



    The idea that you reduce prices to increase volume is such a fundamental idea in marketing and business that you and I are indeed on the opposite page of the debate.



    I want Apple to win in market share, or be the largest seller of mobile Oses. The concern about temporary profitability is what caused Apple to decline in the 90's. Apple was historically one of the largest computer manufacturers in 1995, with about 20% of the consumer PC OS market. From there the only way was down. If the iOS is 20% of the market it is doomed. There is a trade off between temporary profits and long term profits and the viability of a platform. This kind of stuff is remedial.
  • Reply 34 of 43
    asdasdasdasd Posts: 5,299member
    Quote:
    Originally Posted by newbee View Post


    as i understand it, these "strategies" are typically initiated by retailers other than apple. Apple themselves, other than black friday, xmas or student discounts seldom, if ever, discount their merchandise ..... Why would they? If you know differently, feel free to enlighten me with specifics. This "old dog" is always willing to learn "new tricks".



    the first gen iphone, old dog.



    And the reduction in prices which I suggest; where they keep a cheap version of the product, along with the premium versions: the iPod.





    You know, the really successful stuff.
  • Reply 35 of 43
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by asdasd View Post


    you mean the "so called strategy" they are using to dominate the music player market?



    Yes, the strategy of having products of quality and fair prices, as opposed to your stated strategy of : having a cheap product and see whether price per unit is made up for by volume. Do you see Apple lowering the iPod prices to be level with their competition .... of course not .... why should they.



    Quote:
    Originally Posted by asdasd View Post


    The fact remains that Apple reduced it's iPhone prices.



    Again, yes, because of better than expected sales thereby realizing much faster economies of scale, not for this imagined reason by you: reduced to $399 in about 4 months due to crap follow on sales.

    According to Apples 4Q - 2007 reports : "Quarterly iPhone? sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000." ..... These kind of numbers were hardly "crap".

    Quote:
    Originally Posted by asdasd View Post


    And as for what it sold - in the first year about 5% of what it sells now.



    Of course, ....... seeing as how the iPhone is now sold all over the world and has 4 years of history and advertising behind it, unlike in 2007 ... only being sold in US.

    Quote:
    Originally Posted by asdasd View Post


    The idea that you reduce prices to increase volume is such a fundamental idea in marketing and business that you and I are indeed on the opposite page of the debate.



    If all you want is marketshare you can reduce or even, in Googles case, give away your product. That is obvious. What is less obvious, especially to some, is if that is a sound business strategy for Apple. I'm suggesting to you that it is not and judging from Apples quarterly reports they would seem to be of the same opinion.

    Quote:
    Originally Posted by asdasd View Post


    I want Apple to win in market share, or be the largest seller of mobile Oses. The concern about temporary profitability is what caused Apple to decline in the 90's. Apple was historically one of the largest computer manufacturers in 1995, with about 20% of the consumer PC OS market. From there the only way was down. If the iOS is 20% of the market it is doomed. There is a trade off between temporary profits and long term profits and the viability of a platform. This kind of stuff is remedial.



    This whole paragraph is such bullshit I don't know where to start. First off, in 1995 Apple started to "chase marketshare" and temporary profits (as you like to say) by allowing Mac clones. That was not a Steve Jobs decision as he was not there at that time. In 1997, when Steve took over Apple again, one of his first moves was to reverse that decision and get rid of the clones. So it would seem that SJ does not share your "enlightened" views on how to run a business ... To quote DaHarder .... Shocking!

    I'm really glad SJ is in charge, not you.
  • Reply 36 of 43
    asdasdasdasd Posts: 5,299member
    Quote:
    Originally Posted by newbee View Post


    Yes, the strategy of having products of quality and fair prices, as opposed to your stated strategy of : having a cheap product and see whether price per unit is made up for by volume. Do you see Apple lowering the iPod prices to be level with their competition .... of course not .... why should they.



    Fair, is your definition of cheap apparently. Do I see Apple lowering iPod prices to be level with their competition. Yes, I do. The iPod nano. The comparative cheapness of the iPod touch compared to the non-subsidized version of the iPhone. I am arguing for a cheap iPhone along with the premium versions. I really am amazed that that simple business stratagem is causing any furor whatsoever.





    Quote:

    If all you want is marketshare you can reduce or even, in Googles case, give away your product. That is obvious. What is less obvious, especially to some, is if that is a sound business strategy for Apple. I'm suggesting to you that it is not and judging from Apples quarterly reports they would seem to be of the same opinion.



    You are mistaking present day quarterly profits with long term strategy. I have already dealt with this. People are bored wit repetition.



    Quote:

    This whole paragraph is such bullshit I don't know where to start. First off, in 1995 Apple started to "chase marketshare" and temporary profits (as you like to say) by allowing Mac clones. That was not a Steve Jobs decision as he was not there at that time. In 1997, when Steve took over Apple again, one of his first moves was to reverse that decision and get rid of the clones. So it would seem that SJ does not share your "enlightened" views on how to run a business ... To quote DaHarder .... Shocking!

    I'm really glad SJ is in charge, not you.



    The level of debate continues to deteriorate ( temporary profits from licensing?)



    . I didnt say anything about licensing. When Apple licensed it still produced the most expensive PC on the market, so not surprisingly they failed and it was too late anyway. The time to licence and reduce prices was the late 80's and the early 90's before Windows 95. I chose 95 as an example of when it was too late to recover. It still is too late to recover market share in the PC market. And if Apple are too expensive then it will be in the phone market.



    The facts of Apple and the Mac are salutary and obvious, you can make big profits on static ( or more likely) declining market share in a market which is increasing. That can still mean more sales, and profits.



    But then one day the devs are gone to the majority platform, consumers have followed, the golden goose is cooked and you are beleaguered once again.
  • Reply 37 of 43
    asdasdasdasd Posts: 5,299member
    Quote:

    According to Apples 4Q - 2007 reports : "Quarterly iPhone? sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000." ..... These kind of numbers were hardly "crap".



    Of course, ....... seeing as how the iPhone is now sold all over the world and has 4 years of history and advertising behind it, unlike in 2007 ... only being sold in US.



    This deserves a seperate answer.



    Firstly Apple's 4Q is during the time they reduced the prices ( they reduced in 5th September) and they clearly reduced prices for a reason. Since you seem to be opposed to the ideology of Apple reducing prices,



    1) care to explain why they already reduced prices?

    2) care to explain why if their sales were good enough - as you seem to imply - they would forgo profits for volume which is clearly what they did?

    3) Do you think they shoudl add back the $200 reduction? If not why not?



    Faced with the reality that Apple have reduced prices in the iPod line ( with lower priced models) , and in the iPhone line by reducing prices across all lines at the time your apparent argument consists of just throwing a tantrum, repeating that Apple never do reduce prices (and they never will) when they clearly do and have; and directing us to the Quarterly reports. This despite the fact that my argument is not that they are not making profit now ( which they are) , but they may not in future unless they compete on price, which is a simple business argument.



    Apple may want to be a niche smart phone maker, and may keep prices high. I don't know . However I don't feel that the modern Apple wants to be a niche player, so they will probably reduce prices, or keep the 3GS as a lower priced model, a la Nano.



    i cant say what they will do, but if they dont compete on prices they will be back in their niche position. Some Apple fans like that, but I dont .
  • Reply 38 of 43
    tbelltbell Posts: 3,146member
    As an authorized reseller, Radio Shack needs Apple's permission to offer a sale. Apple probably is trying to clear out inventory and is offering holiday deals. Radio Shack probably ran out of inventory because Apple only allocated a certain amount of units to Radio Shack.





    Quote:
    Originally Posted by BUSHMAN4 View Post


    Giving Iphones away at a ridiculous price certainly will create a shortage and a dent in Radio Shacks pocket, as be assured that Apple is not taking the hit for selling discounted Iphones.



  • Reply 39 of 43
    tbelltbell Posts: 3,146member
    Apple is doing what it always does.



    It engages in similar behavior at certain times of the year. For example, back to school time. It offers a free iPod with a Mac purchase to help it clear out old inventory for the new product launch that happens usually in September.



    Apple further offers various reduced pricing on it's lower end products around the holidays. Apple knows that is when people are spending money for others. Any slight reduction in margins it might sacrifice is made up by volume sales. Apple then usually refreshes product in January because it knows that is when people will be using holiday money to buy for themselves. People buying for themselves tend to spend more then when they are buying for others. You will see a reduction in these types of offers after the holiday.



    What is unusual this year is Apple aggressively offering deals to retail partners on the 3GS. Normally, you see more iPad related deals. I suspect Apple may be offering deals to retail partners to clear inventory for a possible launch of a Verizon phone in early 2011.
  • Reply 40 of 43
    tbelltbell Posts: 3,146member
    Normally, Apple has to be careful about lowering it's prices on devices it sells itself. It can't compete with it's third party sellers on price or that would be considered anti-competive. It, however, can move more product if it wants to let it's third party resellers have a limited sale. I suspect Apple is offering resellers a great price on bulk purchases. So places like Best Buy and Radio Shack are getting special volume discounts for buying a large one time purchase of phones from Apple. Once those phones run out, the sale is over because it is a one time deal.



    Apple also probably has a bit of pressure on it to end the year with a bang, and handily beat last years numbers. Although it always pushes product at the holidays, it does seem especially aggressive this year. Allowing TJ Maxx to heavily discount the iPads was a rare Apple move. It has done similar things in the past though where it would sell a big batch of iMacs to some place like Cosco for special pricing.



    Quote:
    Originally Posted by newbee View Post


    As I understand it, these "strategies" are typically initiated by retailers other than Apple. Apple themselves, other than Black Friday, Xmas or student discounts seldom, if ever, discount their merchandise ..... why would they? If you know differently, feel free to enlighten me with specifics. This "old dog" is always willing to learn "new tricks".



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