To drop prices is meant to expand market share and increase volume of sales.
Only if you're selling cans of cola in free competition with other people selling near-identical cans of cola to a market in which customers will buy their cola from the cheapest source. Heck, that's simplistic even for cola, or Coke would have worked out years ago that they just have to charge 2 cents less than Pepsi...
Perhaps someone from Pepsi should run Apple. That should go well!
Sometimes, the best strategy is to sell "Luxury asbestos-free Cola made with genuine hand-picked Brazilian sugar cane and 100% organic phosphoric acid" at 50% over the odds and leave it to WallMart to sell the 30 cent cans of own-brand cola as a loss-leader to generate footfall.
Meanwhile, the computer industry has this awkward little wrinkle whereby customers have invested a lot of time, effort and money learning to use their current platform, buying & learning the software that runs on it and so are very, very reluctant to change. You need more than a $200 price difference to overcome that.
The price points of Intel Macs before M1 was in light of the bill of material cost of the Intel parts.
Sure. It's not like they spend millions a year on market research to find out who bought MacBook Airs, what the maximum was that they were prepared to pay for one, and what proportion would stump up for RAM and SSD upgrades* and design their machines around the strategically chosen price points... because that would be a silly way of running a large business. Nah, they just tot up the manufacturing costs, whack on their standard
x% markup... and it
just so happened to come in at exactly 1 cent below the magic psychological $1000 dollar level.
(* which, curiously, cost
exactly the same on most Apple models, irrespective of whether they consist of an extra pair of DDR4 sticks popped into empty sockets, LPDDR chips soldered to the mainboard or a whole different M1 SoC package with integrated RAM...)
Yeah... I've got this bridge in Manhatten that you might want to buy. Curiously, it costs exactly as much as that lottery win that you just mentioned on Twitter....
The M1 Macs had limited number of ports and configuration to simplify and make more cost efficient the M1 supply chain in building M1 Macs.
No they haven't.
Compared to their predecessors, the new Air and "2 port" (clue!) 13" MBP have the same number of ports (2 - but possibly each with its own TB3 controller which is an
upgrade) exactly the same RAM and SSD options (8 or 16 GB RAM, 256-2TB SSD) and swings-and-roundabouts external display support (higher res, no dual display). The only real change in "number of configurations" is two CPU configurations instead of 3. This "fewer ports/not enough RAM" thing is only coming because the M1 performance is attracting users who would not previously have considered the Air/2-port MBP.
...and, yet again, apparently Apple totted up the BOM, added their standard markup and it just so happened to come to exactly the same as the Intel Air/2-Port MBP. Seriously, folks, although the BOM is obviously a factor, these retail prices are
strategic choices by Apple.
In capitalism, you charge as much as the market will bear.
(The M1 Mini may have a lower price, but it has substantially fewer ports, less RAM capacity, worse external display support than the Intel Mini - it couldn't sustain the same price).
Currently the Mac occupies the price points of the top 20% of the PC market. Lowering prices by $100-200 will expand their price point to occupy the top 30% of the PC market.
Apple isn't in "the PC market" - which includes huge swathes of corporate sales (which are mainly about supply/leasing/support contracts where retail prices of individual systems are barely relevant) and bargain-bucket sub-$500 systems where the seller only makes a profit if they manage to sell you finance, a rip-off extended warranty and a $100 high-fidelity printer cable.
It's pretty clear from Apple's past behaviour that they're only interested in the premium laptop/all-in-one segment of the market, a segment that they pretty much created. Their competition is not the cheap PC, or the boring corporate unit, but the premium Surface Book/Laptop, the Dell XPS, Asus Zenbook, Razer Blade, with which the Intel Macs were reasonably competitive. If anything, those PCs ranges were created to compete with the
Mac rather than vice-versa, and cash in on the premium laptop market that Apple had pioneered. The M1 Macs blow those out of the water on price/performance - they don't need to be cheaper.
Of course, Apple have one other
huge competitor: themselves. Cheap, small, long-battery-life Macs compete with the iPad (which Apple are trying to position as a serious laptop alternative). Cheap
powerful Macs compete with the higher-end Pro Macs - look at all the people on this forum contemplating trading in their 16" MBPs for 13" M1s at half the price or less. Currently, the M1 Macs are, if anything,
underpriced: The #1 job for the "M2" (or whatever) will be to
sustain the premium price points of the higher-end models.
Apple have a history - both with the Mac and the iPhone - of focussing on the premium end of the market and letting the mass market do its thing. Probably because history has proven time and time again that it is very, very hard to wean people off PCs, and the main effect of cutting $200 off the price of a Mac is to make $200 less on each Mac you sell.
Prime example was the Mac clones in the 1990s - theory: license MacOS to OEMs and they'll make cheap commodity Mac clones, grow the Mac's market share, we'll clean up on licensing
and sell high end Mac Workstations. Practice: the clones undercut the high-end Macs and just poached existing customers from Apple. (To be fair, the theory may have been a bit more "help! we need a few million by next quarter to stay solvent - what can we sell").