Apple's Black Friday discounts may rise to 15%, says firm
Investment firm Kaufman Bros. said Wednesday it believes Apple is preparing to offer its deepest Black Friday discounts ever, but said the move has been accounted for in the company's guidance and will be largely offset by falling commodity costs.
Citing supply chain and distribution checks, analyst Shaw Wu, who recently joined Kaufman from American Technology Research, said this year's Black Friday sale is shaping up to be a bit more aggressive than usual.
"Historically over the last couple years, Apple has offered discounts between 5%-10%," he wrote in a research note to clients. "We think there may be discounts of up to 15% this year on Macs, iPods and accessories. It is not clear to us if iPhone will see a discount as well."
Giving the analyst higher conviction is a flurry of related sales from Apple authorized resellers such as Amazon.com (Black Friday Sale), Best Buy (4-Day Apple Sale), and Mac Mall (57 Hour sale). However, he notes that Apple has not made material pricing concessions to distributors or resellers, which means that those parties are taking a profit margin hit on their own.
"We believe the reason retailers are willing to take a hit is due to the ability of Apple products to draw people into stores and the high likelihood that these customers will purchase high-margin accessories including cables, cases and speakers," Wu wrote.
While Apple's move towards deeper discounts this holiday may draw some concern from investors, the analyst said his checks indicate favorable component pricing on memory, hard drives, LCD panels, and other commodities that should help mitigate or offset revenues lost as a result of the promotions.
In addition, he believes Apple intentionally guided its December quarter downwards in order to "leave room" for the Black Friday sale and other promotions.
Wu initiated coverage of Apple at Kaufman earlier this week with a Buy rating and $120 price target.
AppleInsider has recently compiled a list of Mac Apple discounts being offered as part of early Black Friday sales. MacMall's discounts appear to be the strongest yet, with those from Best Buy a close second in most cases. Last year, MacMall's discounts beat Apple's hands down.
Citing supply chain and distribution checks, analyst Shaw Wu, who recently joined Kaufman from American Technology Research, said this year's Black Friday sale is shaping up to be a bit more aggressive than usual.
"Historically over the last couple years, Apple has offered discounts between 5%-10%," he wrote in a research note to clients. "We think there may be discounts of up to 15% this year on Macs, iPods and accessories. It is not clear to us if iPhone will see a discount as well."
Giving the analyst higher conviction is a flurry of related sales from Apple authorized resellers such as Amazon.com (Black Friday Sale), Best Buy (4-Day Apple Sale), and Mac Mall (57 Hour sale). However, he notes that Apple has not made material pricing concessions to distributors or resellers, which means that those parties are taking a profit margin hit on their own.
"We believe the reason retailers are willing to take a hit is due to the ability of Apple products to draw people into stores and the high likelihood that these customers will purchase high-margin accessories including cables, cases and speakers," Wu wrote.
While Apple's move towards deeper discounts this holiday may draw some concern from investors, the analyst said his checks indicate favorable component pricing on memory, hard drives, LCD panels, and other commodities that should help mitigate or offset revenues lost as a result of the promotions.
In addition, he believes Apple intentionally guided its December quarter downwards in order to "leave room" for the Black Friday sale and other promotions.
Wu initiated coverage of Apple at Kaufman earlier this week with a Buy rating and $120 price target.
AppleInsider has recently compiled a list of Mac Apple discounts being offered as part of early Black Friday sales. MacMall's discounts appear to be the strongest yet, with those from Best Buy a close second in most cases. Last year, MacMall's discounts beat Apple's hands down.
Comments
(Apple In-Ear Headphones with Remote and Mic).
All I want to know is WHERE are the new in ear headphones that Steve-o promised us?
(Apple In-Ear Headphones with Remote and Mic).
That's a first- a fine whine before its time.
I really hope they offer a discount on the iPhones. I am planning on waiting until after Macworld to buy one, but if they have a good enough discount, I would get it on Friday. Of course, somehow I think it won't be part of the Black Friday discounts.
I have a few friends hoping for some Leopard discounts. Those are possible along with iLife as usual.
All I want to know is WHERE are the new in ear headphones that Steve-o promised us?
(Apple In-Ear Headphones with Remote and Mic).
I thought I already saw these in those electronics vending machines in Macy's.
I really hope they offer a discount on the iPhones. I am planning on waiting until after Macworld to buy one, but if they have a good enough discount, I would get it on Friday. Of course, somehow I think it won't be part of the Black Friday discounts.
Since the iPhone only sells for $199 anyway, just how much do you think you would save with a discount? If that little amount makes or breaks your purchase, then you probably can't afford an Phone to begin with. The real cost of the iPhone comes with the required 2 year AT&T service plan. Notice that Apple no longer shows the price of the iPhone, or the cost of the various service plans, on their website.
All I want to know is WHERE are the new in ear headphones that Steve-o promised us?
(Apple In-Ear Headphones with Remote and Mic).
Seriously- a friend of mine asked the same thing. Weren't they promised for before Thanksgiving?
I thought I already saw these in those electronics vending machines in Macy's.
well Apple.com has had 'coming soon' for months... I would doubt that Macy's vending would have them exclusively!
i have to laugh here in Phoenix the Macy's is across from the Biltmore Apple store. What doorknob is going to buy out of the vending machine? haha.
All well and good, as long as buyers know that Apple charges a huge premium for additional memory. High-quality RAM can be purchased from OWC or Crucial for a fraction of Apple's price; and every new Mac includes illustrated instructions for installing extra memory.
Apple's ram prices, while still higher than the market average, have come down on most models. Models that max out at 4 GB of ram, can now be upgraded to 4 GB for $150, which is a lot lower than it was a short time ago. Yes, it's still cheaper to upgrade ram from third party vendors, but not as much as it was, and some people are willing to pay the now smaller premium to Apple rather than deal with it themselves.
The MacPro is not part of this new lower pricing on ram from Apple. That price of that ram from Apple continues to be nothing short of ridiculous.
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Apple's ram prices, while still higher than the market average, have come down on most models. Models that max out at 4 GB of ram, can now be upgraded to 4 GB for $150, which is a lot lower than it was a short time ago. Yes, it's still cheaper to upgrade ram from third party vendors, but not as much as it was, and some people are willing to pay the now smaller premium to Apple rather than deal with it themselves.
It doesn't help that Apple insists on using expensive laptop RAM in both the mini and the iMac, both desktop machines. $150 is highway robbery. Someone I know just bought (not upgraded, but bought outright) 4GB of name-brand DDR2-800 RAM with a lifetime warranty for a Hackintosh for $15 after rebate.
I really hope they offer a discount on the iPhones. I am planning on waiting until after Macworld to buy one, but if they have a good enough discount, I would get it on Friday. Of course, somehow I think it won't be part of the Black Friday discounts.
i think you are correct. given that they won't price match it, don't allow employee, corporate or educational discounts on it and blame it on the ATT $200 thing, they aren't likely to offer a BF discount on it. the best you might get is a free case or an itunes card with your purchase.
It doesn't help that Apple insists on using expensive laptop RAM in both the mini and the iMac, both desktop machines. $150 is highway robbery. Someone I know just bought (not upgraded, but bought outright) 4GB of name-brand DDR2-800 RAM with a lifetime warranty for a Hackintosh for $15 after rebate.
You might want to edit that last sentence to where it makes sense.
Apple's ram prices, while still higher than the market average, have come down on most models. Models that max out at 4 GB of ram, can now be upgraded to 4 GB for $150, which is a lot lower than it was a short time ago. Yes, it's still cheaper to upgrade ram from third party vendors, but not as much as it was, and some people are willing to pay the now smaller premium to Apple rather than deal with it themselves.
The MacPro is not part of this new lower pricing on ram from Apple. That price of that ram from Apple continues to be nothing short of ridiculous.
Apple has indeed gotten within shouting distance of third-party RAM prices for the (current) MB and MB Pro, but elsewhere they're not doing so well.
The MacPro, as you noted, is not competitive ($500 to bring it up to 4GB?!?
iMac? Apple wants $150 to up the 2GB models to 4GB, $225 to bring the 1GB low-ender up to 4GB. Crucial will give ya a 4GB RAM kit for $56, about a third of that or a quarter, depending on which iMac you have.
And then there's previous gen MacBook Pros and MacBooks. I've been looking to up my early '08 MB Pro to 4 gigs. 4GB RAM kit from Crucial is $56, just like the iMac, and again about a third of what Apple would've charged me had I done it up front with them.
So, while Apple is doing much better on RAM pricing than they used to on the new MBs and MB Pros (and good on them for doing so), they still have a long way to go most everywhere else.
...
You might want to edit that last sentence to where it makes sense.
4GB for $15. Is that now easy enough for your flea-speck brain to comprehend?
4GB for $15. Is that now easy enough for your flea-speck brain to comprehend?
So, you mean that you bought 4 Gb of ram for $15? No, my "flea-speck brain does not believe you. Maybe you should go back and read the gobbledegook last sentence again, because it doesn't mention who TF you're talking about, Einstein.
Here's what i see as new products for the new year.
1. 17 inch MacBook Pro update.
2. iMac update
3. MacPro update
4. Snow Leopard
5. All or most of the applications getting a full 64 bit update to coincide with Snow Leopard.
6. XServe update
7. iPhone update mid year
8. iPod update towards the end of the year
9. Maybe a completely new product either hardware or software, or both.
Obviously this is pure speculation. But I am more concerned about the economy as a whole and how it will affect the amount of money going into the market in general.