Apple has released an entirely new family of notebooks today, as well as a revamped LED Cinema Display. Instead of reducing prices to soften the friction towards a hurting economy, Apple has decided to remain steadfast in their approach of adding new features and better performance while keeping price points intact.
In the face of completely overhauled Macbooks and Macbook Pros, many analysts still believe that during this struggling economy, Apple’s most important announcement today was the $100 price drop on its entry level Macbook, from $1,099 to $999. Analysts and pundits alike have provided insight into the effect that the rather unchanged prices will have as consumer spending remains at remarkably low levels. MarketWatch reports that Keith Bachman of BMO Capital Markets has stated that “We are modestly disappointed that Apple was not a bit more aggressive in responding to consumer weakness with more aggressive price cuts in its new notebooks,” adding “The new notebooks look great, but we would have liked to have seen modestly more aggressive price points to entice the weakened consumer.”
While at the event, Steve Jobs did note that the MacBook was Apple’s best selling Mac product ever, stating it was “the sweet spot of our market.” Yet the new MacBooks ring in at a base of $1,299 far above previous rumors and speculation. While some anticipation of cheaper MacBooks was in the air, analysts feel that the higher price points may have been a detriment to investor emotion which can be reflected by Apple shares (Nasdaq: AAPL) closing down 5.6% today.
Phillip Elmer Dewitt of Fortune has gone on record stating, “So when Steve Jobs unveiled Apple’s new line of laptops on Tuesday with starting prices of $1,299 for the MacBook and $1,999 for the MacBook Pro, you could almost hear the sound of Apple’s (AAPL) shares falling.”
MacNN is reporting that additional analysts feel the price reduction of the last generation MacBook may prove to be a saving grace. According to Maynard Um of UBS, pricing the notebook under the $1,000 mark “could be a key psychological threshold.” This could very well be an integral move in the face of today’s sluggish economic, despite recent upward movement. Offering a sub $1,000 MacBook will help Apple reach a larger demographic, while more affluent consumers will still have higher end models with great configuration options.
Piper Jaffray seems to be on the same page with UBS as they have noted that the pricing structure may have been strategically arranged to bump consumers to the $1,299 model, a factor of $300 more than its predecessor. “It is because of this that Piper anticipates gross margins remaining on track; September-quarter margins are expected to be as high as 33 percent, and it is thought that FY09 margins will beat Apple’s estimate of 30 percent.”
Apple will be releasing Q4 earnings results one week from today on Tuesday October, 21.
