Re: Apple considers iPad price cuts.

Steve de Mena <st...@xxxxxxxxxxxxxxx> wrote:
-hh wrote:

On a more hypothetical basis, one way that retailers can sometimes
functionally sidestep retail price agreements is to sell the item in
question as part of a "bundle", where the bundle price isn't lower
than their retail price agreement value.  You see this occasionally
with photography gear on a new camera model, etc.

Usually new camera models are in such hot demand there is not much
reason for lowering the price...there is often a waiting list at
places like B&H Photo, Adorama, etc.

Agreed, yet this "hot new product" top-dollar paradigm doesn't last
forever.

For example, less than five months after the Canon 7D dSLR was
announced, B&H is already been "bundling" freebees in with it.
Granted, what B&H is sweetening isn't a huge amount of value-added...
clearly under $100 worth ... its still there, and serves to help
differentiate B&H from their competitors, despite that all of them
have to apparently toe the line on the OEM's official MSRP.


In any event, on Amazon this morning, I see one Apple iPod family
product that's being sold at a 10.7% discount - - is that "Close
Enough" to your 13.8% to be considered synonymous for the purpose of
whatever point you're trying to make?

I don't like the tone of that.  It is perfectly well known fact that
retailers are limited to how much they can discount Apple products.
It's not something I came up with or need to make a "point" of.

And other OEMs don't do this too?
So then what's your point?

10.7% seems like higher than I am used to seeing.  That's nice.
Typically I'd notice Macbooks and MacBook Pros would have a $50 or
$100 rebate.  Plus you got free shipping & no tax in most states.  But
you lose the option of customizing (which I would normally do).

Agreed & understood. FWIW, the 10.7% was a 64GB iPod Touch for $357,
down from $399.99 MSRP. The 32GB has a similar discount: $30 off of
$299.99 (-10.0%). In any case, these discounts typically show up on
Apple products later in their release lifecycle, not unlike anyone
else's products - - what does differ is that Apple pretty adroitly
avoids being the "discounter"...although they've often run a "buy, get
free iPod" back-to-school promotions...just another example of holding
the line officially on price, while adding in freebees.


Which brings up one additional point:  is this talk of 'discounts' one
where the OEM has done it (and it is thus being passed through the
retailer), or is it where the retailer took the initiative, and in
doing so, cut his own margin?

For example, while we may not necessarily know where a retailer's
price cut specifically came from on a particular instance, what is
known is that some of them most undoubtedly came came straight from
the OEM because they actually announced the cut.  For example, here's
(the now laid-off:http://tinyurl.com/btcj89) MS Zune Rep saying "we
cut the Zune's price" (sic):
<http://zuneinsider.com/archive/2007/09/05/price-drop.aspx>

Yes, the Zune HD product prices were reduced $20 just a couple of
weeks ago.

Which was where this current 13% number apparently comes from. I've
not checked into the latest announcement deeply enough to know if it
was MS who "authorized" the cut, or if it is the Retailers bailing out
(clearing inventory, etc), but my point is merely that the 'rules'
regarding these OEM-Retailer price agreements don't apply when the OEM
cuts the price.



-hh
.

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