Apple may be eying sub-$1000 notebook market

Posted:
in Future Apple Hardware edited January 2014
Investment bank Piper Jaffray said Tuesday it believes Apple is readying new iPod and notebook products that will apply downward pressure to profit margins because they'll be priced more affordably, such as 13-inch MacBook that will fetch less than $1000.



During its third fiscal quarter conference call Monday, the Cupertino-based Mac maker caught analysts and investors off-guard by guiding average company gross margin down to 31.5 percent for the current quarter ending September, and down to 30 percent for all of fiscal 2009.



Addressing clients in a report Tuesday, analyst Gene Munster said there appear to be two primary reasons for the margin guidance, which surprised even those experts who've grown accustomed to the company's traditional low-ball estimates.



First, he said, management is likely continuing with its historical practice of guiding gross margin 270 basis points (2.7 percent) below the previous quarter's actual margin. Secondly, he believes the company is preparing to cut the prices of existing products to maintain its momentum during a time of economic uncertainty.



"We believe there is an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points," he wrote. "Specifically, Apple may re-enter the $999 price point (currently $1099) with the MacBook, or test the $1,799 price point with the MacBook Pro (currently $1999)."



The analyst also expects "slightly redesigned iPods" that will include "lower-cost touch-based iPods" in time for the holiday buying season. "We believe Apple is getting slightly more aggressive with its pricing; but overall the company is not diverting from its strategy of premium pricing," he said.



While the focus this week will be "anxiety over gross margin," Munster believes it's only a matter of time before Wall Street clears its head and looks past margin guidance to focus on fundamentals, such as the upcoming product transitions and the positive impact those new products will have on revenue growth.



The Piper Jaffray analyst reiterated his Buy rating and $250 price target on shares of Apple.
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Comments

  • Reply 1 of 81
    shanmugamshanmugam Posts: 1,200member
    if he says so ...
  • Reply 2 of 81
    bpattonbpatton Posts: 19member
    :: whines ::



    Bu bu...end of September is too long of a wait. I want my redesigned alumnimum Macbook Pro nowwwww.
  • Reply 3 of 81
    solsunsolsun Posts: 763member
    In other words, the analyst read the below thread:



    http://www.appleinsider.com/articles...mbers_end.html
  • Reply 4 of 81
    MacProMacPro Posts: 18,373member
    This all may be true, but hardly counts as a mind blowing new product which seemed to be hinted at yesterday. Apple have several things up the corporate sleeve I suspect.
  • Reply 5 of 81
    joedrcjoedrc Posts: 86member
    It sounds weird but I'm dismayed Macs are getting (possibly) cheaper
  • Reply 6 of 81
    SpamSandwichSpamSandwich Posts: 31,417member
    Sure, they have to innovate their way out of the current market (as Jobs has said before, in so many words). Low cost, amazing capability and access to lots of apps and upgrades that no other competitor can touch.
  • Reply 7 of 81
    bigmc6000bigmc6000 Posts: 767member
    Quote:
    Originally Posted by bpatton View Post


    :: whines ::



    Bu bu...end of September is too long of a wait. I want my redesigned alumnimum Macbook Pro nowwwww.



    Eh, I want an Aluminum MB. They can keep the MBP's priced high, that's fine with me. I want an AlumiBook with multi-touch trackpad, 160GB HD, 2GB base RAM, dual 2.4GHz with intel's newest integrated graphics (I'd like dedicated but who are we kidding here?) and the SuperDrive. So, basically, what I'm asking for a $200 price drop on the existing model and make it Aluminum. Another cool deal would be to make all the new ones have double density on the built in cameras...



    Do ya think this is a pipe-dream or actually possible? I really think it's possible!
  • Reply 8 of 81
    solsunsolsun Posts: 763member
    Quote:
    Originally Posted by JoeDRC View Post


    It sounds weird but I'm dismayed Macs are getting (possibly) cheaper





    I don't believe this will happen.. Oppenheimer clearly said that margins would be lower, but it will be transitioning a product or product line to new technologies that the competition can't compete with..



    If he's talking about bringing SSD or Touch technologies into an existing product line, I doubt prices will be cut.. These technologies, particularly SSD will cut into profit margins enough as it is without lowering the prices.
  • Reply 9 of 81
    abster2coreabster2core Posts: 2,501member
    Quote:
    Originally Posted by solsun View Post


    I don't believe this will happen.. Oppenheimer clearly said that margins would be lower, but it will be transitioning a product or product line to new technologies that the competition can't compete with..



    If he's talking about bringing SSD or Touch technologies into an existing product line, I doubt prices will be cut.. These technologies, particularly SSD will cut into profit margins enough as it is without lowering the prices.



    Are you sure you know what 'profit margins' are?
  • Reply 10 of 81
    if Apple introduces Celeron powered MB for $999 and then rips me off by offering new C2D MB for $1199, I will be an angry man.



    Celeron is garbage.
  • Reply 11 of 81
    Quote:

    "We believe there is an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points," he wrote. "Specifically, Apple may re-enter the $999 price point (currently $1099) with the MacBook, or test the $1,799 price point with the MacBook Pro (currently $1999)."



    I believe there is a 100% chance that Apple would benefit by knocking $200 to $250 off the MacBook and iMac, as a way of further boosting market share. To me, it seems an opportune time to take advantage of Microsoft's bumbling and cut into their market share lead, rather than giving them time to recover (which MS might do, eventually).



    If this idea is really stupid, could someone please explain why?
  • Reply 12 of 81
    iphone91iphone91 Posts: 98member
    Quote:
    Originally Posted by syklee26 View Post


    if Apple introduces Celeron powered MB for $999 and then rips me off by offering new C2D MB for $1199, I will be an angry man.



    Celeron is garbage.



    Apple would never do that. They know that there are too many people who are well informed that buy computers today. Their business plan is great hardware and great software. They would not sacrifice that for profit margins.



    Steve
  • Reply 13 of 81
    solsunsolsun Posts: 763member
    Quote:
    Originally Posted by Abster2core View Post


    Are you sure you know what 'profit margins' are?



    Current product X sells for $1999 and costs $1500 to make



    Future product X sells for $1999 and costs $1750 to make because the manufacturer added a more expensive component (like SSD.)



    Therefore profit margins are reduced without lowering the retail price of the product.



    CLEAR ENOUGH FOR YOU?
  • Reply 14 of 81
    Quote:
    Originally Posted by Abster2core View Post


    Are you sure you know what 'profit margins' are?



    Are you sure you do?



    Also, does anyone know when exactly these $200+ price targets are supposed to actually come around? A nice $100 price increase on my shares would be much welcomed!
  • Reply 15 of 81
    tinktink Posts: 395member
    It's something new and different.
  • Reply 16 of 81
    satchmosatchmo Posts: 2,699member
    Hmm...how does lowering the price of a few notebook equate to "technologies and features that others can't match."



    Unless we're talking about MB's with solid state drives and a multi-touch screen selling for $999.
  • Reply 17 of 81
    iphone91iphone91 Posts: 98member
    Quote:
    Originally Posted by satchmo View Post


    Hmm...how does lowering the price of a few notebook equate to "technologies and features that others can't match."



    Unless we're talking about MB's with solid state drives and a multi-touch screen selling for $999.



    Hell yeah! Those would get bought up faster than Microsoft and its affiliates can say "Oh, Shit"!



    Steve
  • Reply 18 of 81
    solipsismsolipsism Posts: 25,726member
    Looking at how much business Apple does with Macs and the projection for the next quarter Mac sales the estimated price drop in the article and the profit margin estimate doesn't add up.



    What is more likely is that the cost of the notebooks will rise. For example, aluminum in the MacBook line and better display panels.
  • Reply 19 of 81
    pt123pt123 Posts: 696member
    Multi-touch screen? Doesn't the screen get dirty enough already without people touching it?
  • Reply 20 of 81
    zunxzunx Posts: 620member
    Apple, make an UMPC (I mean, an UMMac) with a 5-inch or so small screen like this and we will order thousands for our University:



    OQO model e2

    http://www.oqo.com



    We want it for wired and wireless presentations of NATIVE Keynote and NATIVE PowerPoint files. Even the current MacBook Air is too heavy and too large for us. We want it in our pocket!
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