MacDailyNews Note: Apple shares currently stand at $137.50, down $6.66 (a nice number, if you know Apple history), or -4.62%, on heavy volume of 78.78 million shares.
“First, Apple rolled … the iPod Touch — a touchscreen iPod that essentially strips the cell phone chip out of the iPhone,” Moritz reports. “Then, in an unexpected move, Apple killed the 4-gigabit iPhone and slashed the price of the 8-gigabit iPhone by $200, to $399.”
“The move will add more evidence to the speculation that the iPhone, while causing quite a buzz, may not be selling as rapidly as some optimists had expected,” Moritz reports.
Full article here.
Yes, speculation is always much more important than facts. Apple’s iPhone, in July, its first full month on sale, grabbed nearly 2% of the mobile handset market in the U.S. This is unprecedented. Apple today announced that it is on track to meet its goal of selling one million iPhones before the end of September. “Wearing off?” Puleeze. The “iPhone buzz” hasn’t even begun. As many know, Wall Street loves to play games. So does Apple: hardball, obviously. Apple’s competitors lost their lunches (and breakfasts and dinners and snacks) today. In our opinion, if you look up “buying opportunity” in an up-to-the-minute dictionary, you’ll be greeted with a shiny Apple Inc. logo. Look up “Motorola” or “Palm” or any number of others today and you’ll see the same photo of a fresh, steaming crater.
[UPDATE: 9/6, 12:22am EDT: Corrected “2% of the mobile handset market in the U.S.,” not just “2% of the so-called ‘smartphone’ market in the U.S.” Even more impressive, Apple! Thanks, Dan.]
…Oppenheimer say that margins would be less this quarter due to price inventory squeezing or some such something or other? Hence, this price drop isn’t reactionary but rather planned from the get-go.
The iPod Touch sales will eclipse iPhone sales and we’ll hear as much come January 14th.
Look like Apple has become the favorite company for this fscking Wall Street ritual.
*Apple debuts something great (great new iPods, minor price drop on popular iPhone product right before Xmas) – stock must be sold.
*Apple debuts something >meh< (AppleTV) or reports some truly troubling news (Steve’s stock back-dating issues) – stock must be bought/cheered for/protected.
* Wash, rinse, repeat.
On the face of it, it would be easy to say that these institutional brokers and analysts are simply acting stupid. It’s very satisfying to think the powerful are really idiots, and for the most part they are no smarter or dumber than any of the unwashed. However, while they are no better than the Average Joe/Jane in any way that matters (despite what they convince themselves), people who do ‘change money’ for a living do have access to better means.
In other words, the truth here is that they are doing what their positions allow – nothing less than short term market manipulation. They have broad media access (you don’t), and they use it to sow enough FUD when the great stuff happens. Then, when the stock dips for a few hour/s or days, they swoop in and buy – making a killing. On the flip side, when shit is rolling down from Apple’s hill, they claim ‘healthy flowers’ for the masses, sell off slowly, and thus minimize their losses. When you consider the volumes that they buy & sell stock (i.e. massive), even small movements in price equate to big effects. So they create those movements for their own benefit.
Unfortunately, their are people who get wacked by these tactics – typically, the ones who have a lot in the market but aren’t too sophisticated about how it works ‘unofficially’. Buyer beware.
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Too many Wall Street pundits are Beatles fans.
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Reality Check needs a …. well let’s say pause for thought. Sales are beating expectations so much that unit cost is down, and flash is down too in the next few months as more new plants come on line than there is demand for the product.
The price drop was due to timing to some extent, sometime before the year end was on the cards, this early enables more people to plan for their holiday wish list.
Well, nobody would have minded a $100 price drop, but a 33% / $200 drop is really something. Anyway, the one that really has to swallow is the competition. How can Palm, RIM etc. compete with this price?
The share drop is because of profit taking following the run up to the announcement today. Nothing more. This happens every time Apple has an event and announces new products. The bigger the product announcement, the bigger the drop in stock price. The price will recover over the next 3-5 days.
None too happy about the iPhone price drop. I feel a little taken, although I’m still glad I have had an iPhone to use for the past 1 1/2 months.
No “shine” is off of Apple’s iPhone or other products. If anything, Apple is showing a response to the market by removing the slower selling 4GB model and being aggressive with the pricing.
Finally, anyone who wasn’t expecting a touch screen iPod to be introduced soon was living in a cocoon. Anyone who thought the touch screen iPod would have 80GB flash drives was living in a dream world. Apple did the best of both worlds here – more iPod choices (at least temporarily), allowing you to choose the iPod which best fits your needs. The technology simply isn’t there yet to have an 80GB touch screen iPod and have it be affordable. The iPod classic is the bridge until large capacity, inexpensive flash memory is available.
Makes you feel bad for the poor schlubs who bought the iPhone recently.
Wait a minute… I’m one of them. Damn you Apple. Where’s my $200?!
You guys are nuts — this is good news. Apple sold the iPhone at a $200 premium to collect extra cash from suckers..err.. early adopters. They *planned* to collect that $200 premium only from the early adopters, who have, by now, purchased whatever they were going to purchase. So now, as *expected* and planned, they are drop the price down to normal levels for more typical consumers. This is a *smart* move.
Remember, every extra phone that sells also scores them an *extra* $200 from AT&T;, which exactly offsets the lost revenue from cutting the price since these are phones that wouldn’t have sold otherwise.
Iphones are selling EXACTLY as expected, since this move was planned all along.
~Thisson (Yo ho ho!)
zachcube – easy turbo, you can return them. it’s within the 14 days. maybe they have a grace period as well that will allow it? ask before ranting! no one knew this was going to happpen. if you hadn’t bought the phones you wouldn’t care. it just happens to be your luck right now, it’s no one person’s fault.
haha, MDN – ‘ask’, just ask them about it!
Maybe they should turn about, and up the price by $200 quickly, so all the angry owners will be happy again?
It amazes me how, with all of us here real fans of Apple and supposedly familiar with how great this company is, nobody is aware that Apple (much like other really really good retailers) has price protection policy! I believe it is actually printed on the back of your receipt.
According to Apple’s policy, you bring your iPhone and your receipt to any Apple store and they give you $200 back. In practice, this is most often even more generous. I have heard of many cases where the refund was given when a price change happend more than a month since the purchase (new iMac announcement – $300 price difference, 5 weeks after purchase).
It is obvious why Apple can afford to do it. When even Apple’s devoted fans don’t know about this, who else is ever going to take advantage of it? Of course, when you do try it and they do it for you, their image shoots through the roof.
@ MP: Judging from the comments here, yes, Apple should do an about face and change the price back immediately!
To these whiners: a big WHATEVER!
I paid $599 for my iPhone, and not for one second do I regret it. Do I wish I had that $200 back? Sure, but I’m not pissed. Not even disappointed. Besides, if I’m pissed about this price drop, I should be about every other company’s price drop that came after I bought something. And I’m not. People, this is life. Deal.
You might be able to get some cash/credit back. Don’t complain, THINK
I didn’t see Microsoft cutting the Xbox’s price by 33% after only 68 days on the market. Nor did I see Sony doing that with the PS3. Hell, I’ve never seen ANY company do this before. The early adopters have every right to be pissed off.
Apple should do the right thing and offer a $200 mail-in rebate to everyone that purchased an iPhone between 6/29-9/4.
UH Hello! I called ATT and they said they would not take the phones back. WTF, F’n apple crap. Suck it jobs.
magic word : “price”
It does seem a bit crappy for Apple to cut the price by $200. I’m one of those early adopters, and I adore my phone. It’s a fantastic device. However … to cut the price after only 2 months on the exact same phone is a bit too much too early. Usually price drops come with a product-line upgrade. I half expected, when the 4 GB unit vanished, that they were going to cut the 8 GB unit back to the $499 level and introduce a 16 GB unit for $599. THIS would not have made me angry … it would have made sense. But, no, they’re just cutting the price and chopping out the low-end. And I … who bought his iPhone 2 moths ago, have the realization that I paid $100 per month for being an early adopter.
Author doesn’t know the difference between a gigabit and a gigabyte.
There’s no crying in baseball. When WE bought our phones, we paid a price which we thought was fair, otherwise we wouldn’t have made the purchase. Just because Apple decided to lower the price today, shouldn’t change our attitude about the deal that WE were willing to buy into.
I guess if you fill up your gas tank today at the pump and Mobil, Exxon, or HESS decide to cut the price of gas tomorrow, you’re all going to expect some form of compensation? I didn’t think so.
If you bought an iPhone in the last two weeks, call apple customer care, they will refund the difference between the old price and the new. Google “apple price protection”.
You’re welcome bitches.
The number of new customers drawn in by the lowered iPhone prices will easily dwarf the number of early adopters who will complain about the price reduction.
There is a small risk that new customers may hold off purchases in anticipation of even further price reductions. However, the onset of holiday shopping season will mitigate that risk and probably overwhelm it.
If you are looking to enter AAPL, you may want to start scaling in now. Or you can wait closer towards the end of September or early October.
Reason: September is typically the worst performing month for stocks. New money typically comes into the market in October (although October is also a favorite month for stock market crashes also).
As for AAPL specifically, the next major catalysts will be the quarterly earnings release, scheduled for after market close on October 18th, and the release of Leopard that same month.
Apple looks to the future. The one million (or so) people who already bought an iPhone is nothing compared to 20 million who will buy iPhones worldwide by the end of 2008. Apple is not going adjust a smart business decision to make early adopters happier about their past purchases. And you know Apple is still making 25% (or more) margin at $399, not including the revenue from AT&T;.
Bummer to those idiots who bought the overpriced toy called the iphone last week.
Name givenbt Apple to those that buy their crap first — sucker!
Silly Hobbits. Don’t be hasty.
Wait people!
The same thing happened with Aperture.
I got $200 electronic store credit from Apple after price drop.
Maybe you are bashing them too soon.
Maybe they will issue a credit, then you will think:
“what a heck, I add another $150 and get an iPod Touch”
That’s a great strategy to do more sales.