Apple pricing policy between product updates

[Basti.13]

I am new to the community. I have been thinking about changing to Mac for quite a while now and I am proud to announce that I finally feel ready to do it ;-) Just played around with the new MB in a store and really liked the feeling and even more the speed (which is one of the reasons my Windows Laptop has to go now).

I do have one question about Apple’s pricing policies though. According to the Buyer’s guide we’re in “midseason” for the MB/MBP. From what I read here, there is not gonna be a major update soon. So my questions would be:
1. What minor updates can I expect (if any) in the next, say, two to three months?
2. Does Apple ever lower prices between updates? I am used to buying Windows PCs and whenever the hardware got cheaper so did the laptops/PCs. With Apple it seems that I actually get the best value on the day the present a new model because (correct me if I am wrong) the Macbook still costs exactly the same as in October when it first came out. With the difference of course that this is half a year ago and hardware prices should have dropped at least a little bit. So I’d buy older hardware for the same price, right?
3. They don’t give away free updates to Snow Leopard if I buy my Mac now, do they?

What it basically comes down to: I can’t buy the Mac before May. I know that the next update will prolly be a small one (like clock speed, etc) and I don’t really need the power right now but since I usually use my computers for quite a while, I will need it one day. So a faster Mac might not help me now but will last me longer at the end of its lifecycle ;-) Plus, it would be nice to save the 129 Dollars (or whatever it will be) for Snow Leopard.
So, buy in May or wait until when? Are the product cycles of the Buying Guide usually reliable or has that changed over the years?
Hmm, a lot of text for an easy question… But I hope that way it is clear what my problem is.
Thanks for your patience,
Basti.

 

[Demosthenes X]

1. What minor updates can I expect (if any) in the next, say, two to three months?

Minor. Probably just speed bumps.

2. Does Apple ever lower prices between updates?

No. So you're right, you get the best value buying right after an update. But realistically, it doesn't matter if you have the newest or best, since for the majority of users any modern machine can handle their tasks with ease.

3. They don’t give away free updates to Snow Leopard if I buy my Mac now, do they?

No. Why would they?

 

[aaquib]

1. What minor updates can I expect (if any) in the next, say, two to three months?
2. Does Apple ever lower prices between updates? I am used to buying Windows PCs and whenever the hardware got cheaper so did the laptops/PCs. With Apple it seems that I actually get the best value on the day the present a new model because (correct me if I am wrong) the Macbook still costs exactly the same as in October when it first came out. With the difference of course that this is half a year ago and hardware prices should have dropped at least a little bit. So I’d buy older hardware for the same price, right?
3. They don’t give away free updates to Snow Leopard if I buy my Mac now, do they?

1. You will most likely see a processor speed bump, and maybe HDD increases. Most likely just processor speeds. And, unlikely, but we may see the battery technology that's in the 17" MBP.

2. Apple doesn't lower prices.

3. Snow Leopard won't be out atleast until July. If you can wait till then, wait, otherwise it'll cost you.

Personally, I'd recommend waiting for the next hardware revision, but not necessarily for Snow Leopard as we don't know the release date, and who knows, the cost might be minimal.

 

[Gregintosh]

Given the major changes that occured in the macbook line last year, I doubt any ground breaking revisions this time around.

When they do happen, in a few months probably (or maybe in the summer for back to school), it will probably be speed bumps. They will probably also drop the white macbook and make the current mid-range one the entry level one (at the entry level price), move the high end one to mid-range with a small speed bump, and make a slightly better specced one the top end with a larger speed bump and perhaps a better HD standard (maybe a 128GB SSD standard, if SSD prices continue falling).

The mid and high end macbooks might also get 4GB of RAM standard instead of 2GB (which will now be the standard only on the entry level model which will be identical or near identical to the current mid range one).

It is always possible they will update the battery tech (would be nice to have an 8 hour or 9 hour macbook!) or add GPS or 3G built in, but those things probably won't happen for another year or year and a half if/when they make another major revision.

I doubt video card will get any better, as that would blur the line between macbook and macbook pro.

I agree that Apple's pricing policy sucks, and its sucks that they don't pass savings from falling component prices to consumers. So not only do they charge a premium over identically specced computers when they are first introduced, but they also keep the same premium even as component prices fall rapidly (best example was the mac mini which cost the same not long ago as it did when it was introduced at a premium 1.5 years ago).

It also sucks that they do not allow resellers to discount their products either. Apple's resellers must maintain a minimum advertised price (usually the same or similar to Apple's original price). That is part of the contract.

That is why some resellers like to add a lot of mail-in rebate premiums like free keyboard, mice, printers, software, etc. They are actually providing a much better value proposition, paying for these extras by sacrificing the high margin that Apple provides them with.

Btw, when the MacBook Air was first introduced, Best Buy's employee price -- typically 5% over store cost - was $1,074, until they fixed it to be in line with Apple's policy of a minimum price. That means for that brief moment, it was revealed that the profit from a single MacBook Air sale is around $800!. That also means that even now when they sell the MacBook Airs for $1299 or $1399 or whatever, they are not losing out just to get rid of inventory, they are in fact STILL making a few hundred dollars of profit per unit (which is far more profit than PC brands make per unit of any of their machines).

 

[aaquib]

Btw, when the MacBook Air was first introduced, Best Buy's employee price -- typically 5% over store cost - was $1,074, until they fixed it to be in line with Apple's policy of a minimum price. That means for that brief moment, it was revealed that the profit from a single MacBook Air sale is around $800!. That also means that even now when they sell the MacBook Airs for $1299 or $1399 or whatever, they are not losing out just to get rid of inventory, they are in fact STILL making a few hundred dollars of profit per unit (which is far more profit than PC brands make per unit of any of their machines).

There's no way Best Buy could get MBA's for $1074 when it was first introduced. I have tons of friends who work at Best Buy and they all say that profits on Apple margins are ridiculously low.

 

[Basti.13]

Given the major changes that occured in the macbook line last year, I doubt any ground breaking revisions this time around.

When they do happen, in a few months probably (or maybe in the summer for back to school), it will probably be speed bumps. They will probably also drop the white macbook and make the current mid-range one the entry level one (at the entry level price), move the high end one to mid-range with a small speed bump, and make a slightly better specced one the top end with a larger speed bump and perhaps a better HD standard (maybe a 128GB SSD standard, if SSD prices continue falling).

The mid and high end macbooks might also get 4GB of RAM standard instead of 2GB (which will now be the standard only on the entry level model which will be identical or near identical to the current mid range one).

It is always possible they will update the battery tech (would be nice to have an 8 hour or 9 hour macbook!) or add GPS or 3G built in, but those things probably won't happen for another year or year and a half if/when they make another major revision.

Hmm, alright. It would be really nice if someone else could say something about the things mentioned. I know it is just speculation but maybe someone who knows how it has been in the past.
Since I won't get the Whitebook for sure, it would certainly make a difference if they drop the current midlevel one to the entry level.

Is it realistic that this would happen before the back to school things start (I can't really take advantage of them anyways because in Germany you usually only get a "smaller" iPod (I think)? I would hate to wait but I would hate it even more to buy something in May and see it revised or dropped in price only a few weeks later...

But thanks for the quick responses. I really appreciate it!

 

[Gregintosh]

There's no way Best Buy could get MBA's for $1074 when it was first introduced. I have tons of friends who work at Best Buy and they all say that profits on Apple margins are ridiculously low.

I worked for Best Buy when it was introduce, and I remember the employee price for the SKU was $1074 all the way until a day or two before we got it in stock initially. Maybe it was an odd error, but my hunch is that this was the default 5% over store cost calculation, which was corrected upward because of a contract with Apple in which Best Buy agreed not to sell macs below a certain price level.

After the change the price was very close to what Apple charges in their business store.

I also remember that when my store sold one Apple computer (be it a macbook or an iMac, even without accessories) it would often be the only margin they made all day as all the other PCs had virtually 0 margin. There definitely was margin there, and not a trivial amount either.

Maybe that's changed now, it's been about 10 months since I last worked there and even longer since I checked daily scorecards, so I can't vouch for the current situation.

It would not surprise me to hear that Apple charges a 100% markup over their costs. After all, when a retailer picks up a product, they have to make a profit on it too, not to mention cover their costs (including logistics, administration, shelf space, etc.).

Since Apple sells direct, they get the benefit of cutting out a lot of those costs or at least minimizing them, therefore enabling large profits (just like Dell). If Apple made only a hundred dollars per unit sold at retail price, they would have to be losing money going through retailers and other resellers (since they will not carry Apple products if there is no profit in it for them).

----------------

Anyway, moving along to the thread starter. I don't see why it wouldn't be realistic for the mid level macbook to become the entry level model (replacing the white one).

I can't see them bumping up the two aluminum models up in any specs while leaving the current white behind. And I don't see them keeping the white model around much longer either, so I don't think they will bump that up any (cause then the white model would actually be better than the current aluminum).

Initially, the cost would've been high to create the unibody, so they would not be able to make their desired profit margin if they were to sell it at $999. But now that the unibodies have been in production for a while, Apple has no doubt recouped its initial set up costs and achieved economies of scale. It would make sense they would now implement the unibody across the entire line and keep it consistent.

In any case, if you can wait, then I advise you to wait.

If you need a desktop mac, there has never been a better time to buy because it was just updated. If you need a laptop, then the current offerings are very good. I would advise you to get the 2.0 Aluminum, bump up the RAM to 4GB (3rd party) and pop in an SSD (if you can afford it).

If you can wait and plan to buy near the end of summer (around August) then I would wait until they refresh them. Since the last update was around October, August will be around 10-11 months since an update. There is no way Apple will be selling 11 month old MacBooks, which is their TOP seller for college kids and other other students, in August (Back to School season), in a very competitive economic climate.

 

[Abstract]

No.

Of course Apple have lowered a price after an update.

 

[Demosthenes X]

Of course Apple have lowered a price after an update.

The question was "Does Apple ever lower prices between updates?" The answer is no - or at least, it's so rare it's not worth mentioning. When has Apple ever lowered a price and updated their machines at the same time, anyway? Usually the prices stay the same and the hardware improves.

 

[brop52]

The question was "Does Apple ever lower prices between updates?" The answer is no - or at least, it's so rare it's not worth mentioning. When has Apple ever lowered a price and updated their machines at the same time, anyway? Usually the prices stay the same and the hardware improves.

Often times the updates are the price reductions. However, it tends to be on things that are long-standing products that don't change much. This includes the Cinema Displays and BTO upgrades for certain components. (Though they are notorious for keeping RAM prices high when the market prices drop precipitously).