Apple and the Recession

[MBX]

When and if at all will Apple adjust to the Recession or do you think it won't happen at all and they (along other tech companies) will rather have their items rot on the shelf than lower prices?

I'm not saying Apple's stuff is more expensive than others necessarily though.

But will some kind of price drop along all the industry begin soon?

 

[NT1440]

They won't. People who actually want apple products buy them, its that simple, even if they have to save a bit before.

They know they can outlast the recession with a cool 25 billion in the bank.

 

[MBX]

They know they can outlast the recession with a cool 25 billion in the bank.

Just in paper money or gold too?

 

[NT1440]

Just in paper money or gold too?

Does it matter? Everyone knows they have it.

Apple does things the apple way, including pricing. Its worked so far.

 

[Eidorian]

I expect Apple to continue being Apple. What more?

 

[Zombie Acorn]

If they drop prices it has to be calculated (as usual), Apple doesn't want people to think they can't sell and are dropping prices due to the recession. I would suggest any price drops to happen with a new line of apple products, it makes it look like they are giving their people a gift instead of lowering prices because they are hitting rocky times.

 

[BigHungry04]

Apple will not lower prices, they offer features on their computers that are different from other computer manufacturers. They feel that those features are worth the price increase. Since they are still selling a lot of computers, their strategy is paying off. They will probably only lower prices when they need to move old product off the shelves.

 

[SactoGuy18]

I think it is the deep recession that Apple will have to consider abandoning the iMac and going to mini-tower machine route, selling what looks like a reduced height Mac Pro for around US$800 to US$1,000 fully equipped and allowing the use of third-party monitors that have Apple certification for color and sharpness quality. This would allow Apple to sell a machine in the US$1,350 range (including third-party 24" LCD panel) instead of paying around US$2,000 for an all-in-one iMac.

 

[liptonlover]

I don't think apple will be dropping prices. Last quarter was their best ever, even though we're already in the recession. Also, I agree they aren't going to make it look like they're forced to drop prices. You know how they haven't made a netbook yet? They may be saving it in case they need a cheaper computer to get them through looking good. Sure they can wait out the recession, but why do that when there's money to be made? It also looks better if they're making money anyways.

 

[Eddyisgreat]

Apple will only raise their prices, not drop them. Apple caters to a different crowd, upscale consumer niche whatever you want to call it. Jobs already said he isn't interested in budget comps because that always has been and will be a 'race to the bottom' where the choice is alot more diverse and it'll be harder to stand out from the pack, dealing with consumers who are looking to stack rebates on top of coupons on top of stripped features just to have the bare minimum.

Since their products probably reap in more profit anyway they don't need as much volume sales as the other guys to make it.

 

[IJ Reilly]

Companies rarely drop product prices, and effectively they can't unless their costs of production are lower. They may lower prices on products already in inventory, but this is usually very bad news for the company. Apple's inventory control has been excellent in recent years, so I wouldn't expect them to be caught in this recession with excess inventory that they need to dump at lower margins.

It is also extremely unlikely that Apple will completely revamp their product line, if only because their strategy has been extremely successful to date -- in fact, the envy of the industry. Anyone who believes that Apple will or should start selling mid-towers or cheapo laptops now, because of the recession, is making the same pie-in-the-sky arguments we've been hearing for years. Apple has never been interested in selling low margin products.

 

[SwiftLives]

I think it is the deep recession that Apple will have to consider abandoning the iMac and going to mini-tower machine route, selling what looks like a reduced height Mac Pro for around US$800 to US$1,000 fully equipped and allowing the use of third-party monitors that have Apple certification for color and sharpness quality. This would allow Apple to sell a machine in the US$1,350 range (including third-party 24" LCD panel) instead of paying around US$2,000 for an all-in-one iMac.

Nope. I don't see a minitower in Apples future. I do see a revised Mac Mini - which they may reduce the price point to $500 instead of $600. I also would not be surprised to see a netbook or tablet or some variation among those concepts.

The Mac Mini is Apple's answer to the minitower. The iMac is their best selling desktop, and is competitively priced, so it's a very safe bet that Apple is not going to drop it anytime soon.

 

[mogzieee]

I think Apple will walk though this recession like it's a sunny day in the park.

Apple is a strong company that makes millions every day. It's not like they're going to crash and die anytime soon, as with most other companies.

 

[Amdahl]

Apple and the Depression

This isn't a recession, boys.

 

[IJ Reilly]

This isn't a recession, boys.

BS. Hard to say it more clearly than that, boys.

 

[synagence]

Apple don't tend to hang with the rest of the market forces ... they have $30bn in cash - they'll ride out this out ... they may even use the oportunity to acquire a new company although thats not really been apples main style.

Things maybe will change based on Q2 earnings call ... but then most likely new imac's, macpro and macmini will be on the verge of being released (or will have been in the market a short time) and the next iphone will be appearing at the end of Q2 early Q3 (based on Phil's comments about iphone cycle being june) so i think they're quite well placed to sit pretty for 2009.

 

[bettykoyle]

they will still do well

people will pay more the quality of there products nowadays

 

[Eidorian]

BS. Hard to say it more clearly than that, boys.

Read their post title...

 

[IJ Reilly]

Read their post title...

Sorry, don't follow -- unless you were referring to the word "depression" in the post title. That's exactly what I was calling BS.

 

[SactoGuy18]

Nope. I don't see a minitower in Apples future.

I do--for one reason: the iMac in the current economic climate is too expensive for most users, and Apple knows this even with US$30 billion in cash on hand.

While the product may not see the light of day (depending on the what happens with the economy later this year), Apple probably has a fallback position to have a minitower machine ready to be greenlighted for production very quickly so Apple can keep the buyers that will normally buy the iMac.

 

[NT1440]

I think it is the deep recession that Apple will have to consider abandoning the iMac and going to mini-tower machine route, selling what looks like a reduced height Mac Pro for around US$800 to US$1,000 fully equipped and allowing the use of third-party monitors that have Apple certification for color and sharpness quality. This would allow Apple to sell a machine in the US$1,350 range (including third-party 24" LCD panel) instead of paying around US$2,000 for an all-in-one iMac.

Do you go on tour???

Its been a while since I've had a good laugh like that.

 

[MBX]

Guys i never intended this thread to be about Apple and how they're going to do during recession/ depression.

But about US and if us people can expect lower prices in such a bad economy.

 

[NT1440]

Guys i never intended this thread to be about Apple and how they're going to do during recession/ depression.

But about US and if us people can expect lower prices in such a bad economy.

Well that answer is no.

 

[IJ Reilly]

Well that answer is no.

Add to that, we'd better hope not. A lot of lower prices means deflation, and deflation can mean depression. On the list of things you better not wish for, deflation is right near the top, not too much after nuclear war and bubonic plague.

 

[i7.920]

Its worked so far.

Except for that dark era in the mid nighties...

Pah, a good recession now and then keeps people on their toes. On Average every 7-9 years. this time it's a little worse than the last (2001.) and the one before that 1996/7. We'll see if it gets as bad as 1987/88.

I'm in the mining game (work for Xstrata Coal) and you have to roll with the punches, Apple like every cooperate giant will do what it needs to do to look after it's stock holders. If lowing prices to move stock is seen as a good move it'll occur, if sacking 5% of the work force in administration and sale seems like a better option for saving cash don't rule it out.

Cheers
J