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Apple Slaps Up to 10% Price Increase on Built-to-Order Mac Configurations in Many Countries
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US pricing doesn't include state or local sales tax, which is similar to VAT. Since VAT is uniform across UK sales, it's included there.
I am a fan of Apple products and have bought high-end iMacs for years with an average cost of about $2400.00. As I consider upgrading, I realize that Apple's prices are so inflated that the market is being destroyed from the inside. Now, a "decked out" 27" iMac is well over $3500; that's absurd. And the iMac Pro is out of the question. Since I don't want a Macbook, then what's left?
Sometime during all the launch hype of last week's new MacBook Air and iPad Pro, Apple quietly increased the prices of almost all Mac build-to-order options on its regional online stores outside the United States.
In Canada, Europe, Australia, and many parts of Asia, customers configuring any new MacBook Air, MacBook Pro, iMac, iMac Pro, Mac Pro or Mac mini now face paying approximately 10 percent more for each component upgrade than they did prior to last Wednesday.
In the U.K. for example, when customizing a base configuration 2.3GHz 8-Core 16-inch MacBook Pro, upgrading to a 2.4GHz processor costs £200, where previously it cost £180.
Likewise, jumping from 16GB to 32GB of RAM now costs £400 (previously £360), bumping the AMD Radeon Pro 5500M GPU from 4GB to 8GB costs £100 (previously £90), and upgrading from 1TB storage to 2TB costs £400 (formerly £360).
Altogether, the hikes add an extra £110 to the price tag of this built-to-order 16-inch MacBook Pro - a combined total of £3,899 rather than £3,789.
16-inch MacBook Pro BTO prices - March 16 compared to March 23
Apple didn't change the standard prices of its Mac base configurations, which is probably why the changes initially went under the radar. However, two eagle-eyed readers from the U.K. got in touch with MacRumors after the total cost of their custom Mac configs, which had been languishing in their online Apple Store bags for a time, suddenly changed overnight.
It's not clear what provoked Apple to raise BTO Mac prices for consumers outside the U.S., although fluctuations in exchange rates, supply constraints, and labor shortages can't be ruled out. Either way, the fact remains that processor, RAM, graphics, and storage upgrades selected during checkout cost around 10 percent more than they did this time last week.
(Thanks, Andy and Glen!)
Article Link: Apple Slaps Up to 10% Price Increase on Built-to-Order Mac Configurations in Many Countries
Hum ... When you know that you are going to spend at least the next two months lockdown working from your computer
If you have an aging Mac, yes it can be a relief to get a new Mac which works better
Also, if your kids needs to do school at home, you need to provide them a computer, and so, some people give to their kids their old Mac and buy a new one
So you're saying Apple are making a loss on base models? Or that buyers that need more than base model specs are subsidising buyers that only need base models?
Not necessarily a loss, but certainly a lot less than they’re average gross margin (32%) for hardware products.
Without a doubt. The pricing of upgrades sure seems to imply a greater gross margin than 32%, so I think we can assume the lower priced SKUs (for instance, the MacBook Air base model and the $1,099 i5) are well under the 32% average.
Apple has priced this way for decades. They want to price the base model as low as they possibly can—get it into the hands of the most customers—while still making their target margin. As long as they can average 32-ish percent across the market basket of purchased SKUs, they don’t have to make exactly 32% on every individual config.
One can debate the “fairness” of the pricing model, but many, many other manufacturers do the same. Car manufacturers are a textbook example. Should leather seats really be priced at $2,500, when they only cost an extra $80 in materials cost? Maybe not, but if 1 in 10 takes the option, the base price can be lowered $250 for everyone.
Yeah, of course it's not fair. And of course it means buyers like me are sticking with my 2015 MBP where I can upgrade my SSD at will (and have, and will again), at market prices. I'd *like* to buy a new 16", but the upgrade prices simply price me out of the market, and since you can't self upgrade after purchase, I can't just choose what I need now, and upgrade later. And since I do more than simple web browsing, I can't just buy a base model. So no sale. So for now, my 2015 works perfectly (including keyboard, ports, no overheating, etc), and while it keeps working, and while I don't need more than 16GB RAM, then I'll keep using it. Same for my son's MBA. I'd love to buy him one of the new one's, but the base model is reasonably priced, but inadequate, and the upgrades are too expensive. So again, no sale. I'm sure Apple's bean counters have run the numbers and their way of doing it gets the most profits. But it gives Apple a bad name, and is one of the many reasons Apple fans like me are furious at the direction Apple has headed.
Would it really be helpful to have the MBA Air priced at $1,500 base, with upgrades priced at half their current levels? Would you pay more or less?
Macs are expensive. Don’t make the mistake of thinking a different pricing strategy would somehow change that.
Your logic is all messed up dude! Strangest justification for price gouging I've ever heard.
why can't APPLE start selling it's OS to be installed on hardware of your own choosing?
I mean really this is amazing! A AMD Threadripper system built for under $2000 that runs way faster than the $6000 Mac Pro
APPLE could Sell Catalina to run on any hardware for say $150 to $250 a license ??
I mean really this is amazing! A AMD Threadripper system built for under $2000 that runs way faster than the $6000 Mac Pro
APPLE could Sell Catalina to run on any hardware for say $150 to $250 a license ??
The license would have to be so expensive to make up for the loss in hardware sales.
They also tried it in the 90s and they very nearly went out of business when utilising that business model.
What gouging? Apple makes around 20% net profit on revenue, other companies make much more. Microsoft, for instance, made 35% last year—almost twice has high as Apple. But of course none of the Apple-hate crowd ever complains about how much profit Microsoft makes lol.
Apple’s prices are high because their costs are high. Apple’s a huge company with 500+ retail stores, 130,000+ employees and $3+ billion per month in operating expenses, including $1.5 billion in R&D spend.
As I said, upgrades subsidize the entry level models. Apple could cut the cost of upgrades, but they’d have to raise the starting price of the base model to offset the loss of margin. That’s not their preference.
You want a cheaper Mac—I get it. But you can’t have it. Whether Apple has a pricing strategy of a cheaper base model with higher priced options—or a more expensive base model with lower priced options—either way it’s not going to be cheap. I don’t know what else to tell you.
Well, though it may not sound like it—I’ve been singing this song for quite awhile and sometimes my patience can wear thin—I’m actually sympathetic to the cause. I’d love a cheaper Mac, too. Who wouldn’t? lol
But I’m also realistic. Apple’s not going to take a loss on Macs, no matter how large gross margin is on services (about 64% praise be, which helps subsidize hardware prices 🙂 ).
A lot of people only consider BOM cost when they think about what a Mac “should” cost. But that’s maybe half the cost build up that’s in COGS. And after R&D, other operating costs and taxes are accounted for, Apple keeps about 21¢ of each revenue dollar.
Over the past few years, Wall Street has become, though somewhat reluctantly and belatedly, basically ok with that 21% net income. But it’s none too much, and without services, Apple’s P/E multiple would still be sucking 🤷♂️
Well, though it may not sound like it—I’ve been singing this song for quite awhile and sometimes my patience can wear thin—I’m actually sympathetic to the cause. I’d love a cheaper Mac, too. Who wouldn’t? lol
But I’m also realistic. Apple’s not going to take a loss on Macs, no matter how large gross margin is on services (about 64% praise be, which helps subsidize hardware prices).
A lot of people only consider BOM cost when they think about what a Mac “should” cost. But that’s maybe half the cost build up that’s in COGS. And after R&D, other operating costs and taxes are accounted for, Apple keeps about 21¢ of each revenue dollar.
Over the past few years, Wall Street has become, though somewhat reluctantly and belatedly, basically ok with that 21% net income. But it’s none too much, and without services, Apple’s P/E multiple would still be sucking
).
It’s basically confirmation bias. If you are always so negative about Apple, then every piece of news will naturally be interpreted in the worst light possible. It doesn’t matter what Apple does, it will never be enough.
And I think people maybe expect Apple to operate on the same razer thin margins as other hardware makers. In some people’s heads maybe decent profit margins are reserved only for software companies?
Where are you getting your 20% from. I don't think it's accurate: https://finbox.com/NASDAQGS:AAPL/explorer/gp_margin