Is MBP inventory piling up after the price increases?

[Mity]

My local Microcenter has 15 high-end M5 Max 128GB/4TB 16" Macbook Pros in stock. In the past, they rarely had this much inventory. I think it's because of the new $8,000!!! price tag but I'm not sure if it's just this location or whether it's happening elsewhere and at other retailers as well.

I was reading articles on RAM prices and they're expected to double from 2026 levels next year. I'm curious if this means people are just going to delay purchases/extend upgrade cycles or if Apple will eventually have to lower prices and earn less margin?

 

[maflynn]

I was reading articles on RAM prices and they're expected to double from 2026 levels next year. I'm curious if this means people are just going to delay purchases/extend upgrade cycles or if Apple will eventually have to lower prices and earn less margin?

The typical mindset when high inflation erodes price stability, is to buy now, because it will be expensive, however for luxury items, people just stop buying them. I think sales are slowing down and if apple increases prices again, I suspect sales will continue to slow down.

As for Apple reducing their 30% profit margin, one would hope, just keep the their products affordable. We'll see, as no one can really guess what will do in the future.

 

[Mity]

The typical mindset when high inflation erodes price stability, is to buy now, because it will be expensive, however for luxury items, people just stop buying them. I think sales are slowing down and if apple increases prices again, I suspect sales will continue to slow down...

I did my fair share of hoarding with Trump's tariffs last year, anticipating a trade war. I had purchased a CTO M4 Pro mini and CTO M4 MBA and while I didn't anticipate the war in Iran and the recent price spikes, the tariff fear purchases allow me to get by for a few years.

 

[JPack]

The buyers at MicroCenter probably got wind of the price increases and loaded up on inventory. Good for them too, since we now know M6 will be short lived and won’t have Pro/Max variants.

Those are not luxury items and the consumers buying 128/4T likely need it for work rather than fun.

 

[Mity]

The buyers at MicroCenter probably got wind of the price increases and loaded up on inventory.

Slight misunderstanding - there are currently 15 in stock but in the past it used to be around 5, not because people were buying them but because it was a low volume SKU. Most of their inventory used to be the base MX models and MX Pro models. So, I think what actually happened is that the orders they previously placed are not selling and inventory is piling up because of the price. That's just my guess of course. I'll be watching Apple earnings more closely this year to see what happens to unit sales.

 

[JPack]

Slight misunderstanding - there are currently 15 in stock but in the past it used to be around 5, not because people were buying them but because it was a low volume SKU. Most of their inventory used to be the base MX models and MX Pro models. So, I think what actually happened is that the orders they previously placed are not selling and inventory is piling up because of the price. That's just my guess of course. I'll be watching Apple earnings more closely this year to see what happens to unit sales.

But why would inventory increase? The only reason is MicroCenter buyers are adding more inventory. The inventory doesn’t add itself. Buyers carefully monitor inventory turnover across their portfolio and issue POs to obtain more stock.

 

[Mity]

But why would inventory increase? The only reason is MicroCenter buyers are adding more inventory. The inventory doesn’t add itself. Buyers carefully monitor inventory turnover across their portfolio and issue POs to obtain more stock.

Companies have supply agreements to buy x units ahead of time. I'm sure they have flex options to add to their orders in case of higher demand but I suspect this not to be happening given the new ridiculous pricing. Rather, I think what's happening is that sell-through has reduced, causing inventory to pile up.

 

[JPack]

Companies have supply agreements to buy x units ahead of time. I'm sure they have flex options to add to their orders in case of higher demand but I suspect this not to be happening given the new ridiculous pricing. Rather, I think what's happening is that sell-through has reduced, causing inventory to pile up.

Having worked in the same industry as Micro Center, I can confidently tell you that's not the case.

Given Apple's brand recognition and product line, their model is based on allocations rather than forward commitments. Apple stuff is guaranteed to sell. The situation is rather, does Apple give you the allocation and let you sell their stuff?

This is common sense as well. If you look at Best Buy, do they carry 128GB/4T models? No. And Best Buy is much, much larger. The only way these ultra high spec machines are ending up at Micro Center is because buyers at MC put in POs. And it makes sense because MC is targeted at special, more tech demanding customers.

 

[Mity]

Having worked in the same industry as Micro Center, I can confidently tell you that's not the case.

Given Apple's brand recognition and product line, their model is based on allocations rather than forward commitments. Apple stuff is guaranteed to sell. The situation is rather, does Apple give you the allocation and let you sell their stuff?

This is common sense as well. If you look at Best Buy, do they carry 128GB/4T models? No. And Best Buy is much, much larger. The only way these ultra high spec machines are ending up at Micro Center is because buyers at MC put in POs. And it makes sense because MC is targeted at special, more tech demanding customers.

By allocations, are you referring to minimum order quantities? If so, that isn't any better news because then the inventory isn't moving. Actually, I would need to watch the inventory level for a month or longer to be certain. To be clear, I'm not suggesting that Apple is channel stuffing.

Actually, it isn't common sense. It's actually common sense to assume that a computer that used to cost $6000 but now costs $8000 will sell less, not more, hence my question if people are seeing this at other locations and merchants. The only reason why I think a reseller would do this is that they think the component supply shortage could get worse due to AI and the Iran War, so the goal is to build up inventory now while it's still available.

 

[JPack]

By allocations, are you referring to minimum order quantities? If so, that isn't any better news because then the inventory isn't moving. Actually, I would need to watch the inventory level for a month or longer to be certain. To be clear, I'm not suggesting that Apple is channel stuffing.

Actually, it isn't common sense. It's actually common sense to assume that a computer that used to cost $6000 but now costs $8000 will sell less, not more, hence my question if people are seeing this at other locations and merchants. The only reason why I think a reseller would do this is that they think the component supply shortage could get worse due to AI and the Iran War, so the goal is to build up inventory now while it's still available.

Allocation means there's insufficient product to go around. Apple picks who gets to receive their products to resell.

Apple doesn't need to force Micro Center to do MOQ. Look at Apple Store delivery dates for 16-inch MBP 128GB/4T. It's currently Aug 24 - Aug 31. Apple can't even serve their own customers quickly enough, why would they force Micro Center to stock up and share the profits?

In all likelihood, Micro Center bought these Macs when Tim Cook warned prices would increase. They've seen PC memory and storage spike, why wouldn't Apple pass on the same increases?

Inventory isn't piling up, rather retailers were stockpiling high end models. Tim Cook's warning came on June 17. It's one month later and retailers who ordered back then are finally receiving their orders now.

 

[Wizec]

I ordered an Macbook Pro M5 Max 14" with 128GB of RAM on June 24th. It still hasn't shipped. Maybe because it's a less common configuration, but I sure wish it would just get here :-D

 

[JPack]

I ordered an M5 Max 15" on June 24th. It still hasn't shipped. Maybe because it's a less common configuration, but I sure wish it would just get here :-D

Anyone paying attention ordered the second Tim Cook gave his warning. It’s why so many retailers placed rush orders for Apple products last month. The writing was on the wall. Retailers who stockpiled DRAM and NAND last year are already living large, and this Apple situation was basically an encore.

 

[Wizec]

Anyone paying attention ordered the second Tim Cook gave his warning. It’s why so many retailers placed rush orders for Apple products last month. The writing was on the wall. Retailers who stockpiled DRAM and NAND last year are already living large, and this Apple situation was basically an encore.

Whoops. I meant to say 14" Macbook Pro with the M5 Max, 128GB of RAM. I got my order in the night before the big price increase :-D. Can't wait to run local LLMs on it.

 

[Mity]

Apple doesn't need to force Micro Center to do MOQ. Look at Apple Store delivery dates for 16-inch MBP 128GB/4T. It's currently Aug 24 - Aug 31. Apple can't even serve their own customers quickly enough, why would they force Micro Center to stock up and share the profits?
...
Inventory isn't piling up, rather retailers were stockpiling high end models. Tim Cook's warning came on June 17. It's one month later and retailers who ordered back then are finally receiving their orders now.

For one, since Apple doesn't do consignment sales, a sale to Micro Center would immediately go to Apple's bottom line. And not only that, it would be a volume sale, so instead of the usual 5, it becomes 10 or 15. So, Apple has an incentive to sell to a reseller as opposed to an individual who may cancel or return the high-end config.

It may be indeed be that resellers are stocking up. The only way to tell is to actually watch the inventory level. I haven't seen it change in a week. In the past, Micro Center was the best place to get a high-end config because you didn't have to wait for extended delivery times, and they always had high sell through. I would see 5 units on hand and then over the course of the month, they would sell out. I've yet to see that but again this is only speculation on my part, hence the question.

 

[JPack]

For one, since Apple doesn't do consignment sales, a sale to Micro Center would immediately go to Apple's bottom line. And not only that, it would be a volume sale, so instead of the usual 5, it becomes 10 or 15. So, Apple has an incentive to sell to a reseller as opposed to an individual who may cancel or return the high-end config.

1) B2B sales are on Net 30 terms. And consumer sales via credit card settle in 1-3 days. Either way, the sale is recorded as revenue immediately based on standard accounting practices (GAAP).

2) Apple selling to Micro Center incurs a discount between 10-15%. Reseller margins cut into Apple's take.

3) Apple selling direct to consumer means they can attach high-margin sales (AppleCare+, accessories). This is far more preferable.

4) Total units sold stays the same regardless of channel. When Apple sells 15 units to Micro Center, the total addressable customer base remains the same. It's not like 15 additional customers pop up. If MC cannot sell their MacBooks, they have to discount them, meaning it competes with Apple.

In short, Apple tolerates resellers like Micro Center because Apple Stores can't be everywhere. They also let resellers discount Macs when Apple doesn't want to be seen doing it. But Apple selling direct to consumers is 100% preferable than selling to resellers.

 

[Mity]

1) B2B sales are on Net 30 terms. And consumer sales via credit card settle in 1-3 days. Either way, the sale is recorded as revenue immediately based on standard accounting practices (GAAP).

2) Apple selling to Micro Center incurs a discount between 10-15%. Reseller margins cut into Apple's take.

3) Apple selling direct to consumer means they can attach high-margin sales (AppleCare+, accessories). This is far more preferable.

4) Total units sold stays the same regardless of channel. When Apple sells 15 units to Micro Center, the total addressable customer base remains the same. It's not like 15 additional customers pop up. If MC cannot sell their MacBooks, they have to discount them, meaning it competes with Apple.

In short, Apple tolerates resellers like Micro Center because Apple Stores can't be everywhere. They also let resellers discount Macs when Apple doesn't want to be seen doing it. But Apple selling direct to consumers is 100% preferable than selling to resellers.

1) I wasn't referring to days; I was referring to quarters, as in the reporting period. And selling directly to a consumer is not necessarily the same. When Apple sells directly to a person, they have to take an allowance for returns due to change to mind and defects. I don't how they structure the sales agreement with retailers like Micro Center but if the third party retailer can't return the product to Apple, Apple wouldn't record the reserve, meaning Net Revenue would be higher. What I meant by immediate was the lack of uncertainty.

2) Apple isn't a charity. They've done the cost benefit analysis with opening standalone stores vs. selling through Micro Center. I actually spoke to an employee last year (could've been year before too) and he told me that the discounts are actually set by Apple. I think that makes sense because I've noticed that outside of national holiday events, certain retailers will have sales while others don't. And then, almost magically, a different retailer will have the sale on the exact same Apple product but the original retailer will not. So, I don't think Apple "tolerates" third parties; I think they manage them for the privilege of selling Apple products.

3) You can add AppleCare+ within 60 days from the date of purchase at any retailer, not just Apple. Is the likelihood higher directly through Apple? Maybe. I have no idea...

4) Misunderstanding on your part: I never said anything about total unit sales. I'm sure Apple would prefer to earn guaranteed sales of 5 or 10 or 15 units at once compared to a potential order by a single customer. The uncertainty is then shifted to the retailer and doesn't sit with Apple.

Obviously we don't know what has happened to unit sales since the price increases. We'll have to wait for Q4 earnings to see. It could very well be the case that MC is too low volume to actually matter and that unit sales have not been hurt. But going from $6K to $8K...I doubt it. I'd be very surprised if they sell the same or more units in Q4.

 

[Moukee]

I got the 14" MacBook Pro with M1 Max (24C GPU, 64 GB RAM, 512 GB SSD) in early 2022. I just checked and I paid 3,439.-€ for that configuration.

I started thinking about upgrading with the launch of the M4 line as the chips started getting significantly faster compared to my M1 Max, especially on the CPU-side. The M4 Pro still didn't support 3 external displays, but the M5 Pro finally supports that, so I have no need for the Max chip anymore.

My main problem with upgrading - even before the price increase - is that it's essentially just a chip upgrade I'm paying for. I would pay again for the same display, chassis, RAM (at least amount), etc. Coupled with laughably low trade-in prices (Apple would pay 535,-€ today, rebuy would pay around 650,-€) I just never really bothered. I don't need to upgrade, my device still works very well, but I obviously wouldn't mind a faster chip.

I have AppleCare+ on this device so if anything ever happens, I should be good. I just hope Apple doesn't pull macOS update support anytime soon (in which case I'd look elsewhere anyway).

So yeah, overall I wouldn't be surprised if these devices aren't exactly flying off the shelves right now. The upgrade path wasn't great even before the price hikes, anything with an M chip in it is still good for most people anyway so it's easy to stick with what you've got.