“Best Buy Co. said it stopped some sales of Apple Inc.’s iPhone X and iPhone 8 after consumers complained about the retailer charging a $100 premium on the already expensive smartphones,” Mark Gurman reports for Bloomberg. “The company, one of Apple’s key retail partners, still sells all iPhone models via carrier installment plans that let customers pay for the devices over several months. The price of these payment programs are the same as the monthly plans offered directly by carriers like Verizon Communications Inc. and AT&T Inc. and similar offerings on Apple’s website. ”
“Last week, when users went to Best Buy’s website to purchase an iPhone X at the full, upfront price, Best Buy charged $1,099 and $1,249 for the two configurations. Apple’s pricing is $999 and $1,149,” Gurman reports. “‘Although there was clearly demand for the un-activated iPhone X, selling it that way cost more money, causing some confusion with our customers and noise in the media,’ Best Buy spokeswoman Danielle Schumann said. ‘That’s why we decided a few days ago to only sell the phone the traditional way, through installment billing plans.'”
“The retailer gets payments from carriers when it sells phones that are already set up to work on the carriers’ networks,” Gurman reports. “It doesn’t get that money when devices are sold without carrier activation. Still, Apple, carriers and some other retailers stick to the official pricing.”
Read more in the full article here.
MacDailyNews Take: Translation from Best Buy speak: We thought we could get away with it, but it quickly blew up in our face. So, we’re backpedaling as fast as we can.
SEE ALSO:
Best Buy says iPhone X costs $100 extra at full price because flexibility sometimes ‘has a cost’ – October 27, 2017
Pretty hard in 2017 for any retailer to improve their margin, even when super hot and very supply limited. Too many other channels available.
I was one of the ones who got caught by the Best Buy price hike. I cancelled my order and bought from Apple. Thought I was getting away with something getting my order by Nov 3rd thru Best Buy. Thank you MDN for pointing out what was happening.
Another Best Buy marketing stunt perhaps??
This isn’t Best Buy gouging customers. Apple sells the iPhone to most stores at a price higher than what they sell it to consumers for. The only way the store can not lose money is if they sell the phone with a plan and get the commission from the carrier. It’s not just Best Buy – try to find another authorized dealer that will sell an iPhone X for $999 without an activation. It doesn’t happen. It’s an Apple issue.
If I wanted one and it was available at Best Buy now while a month or more backordered through other channels, I’d certainly pay the $100 more.
They do not sell it to Best Buy for more than the retail price. Apple reseller margin is 3-10%, and the numbers I’ve seen show about an 8% average on hardware. Money is made on accessories. Apple care is 40% margin for reseller, and I’m assuming that the third party insurance that stores like Best Buy and the phone stores sell is even higher, with no inventory costs. Don’t get me started on them trying to sell a phone case for $50 and car chargers for $30.
I got an email from Verizon offering me a $300 discount on the iPhone X and Best Buy is overcharging for what is already an overpriced phone?
No wonder the company is hurting financially.
I could have told you this was gonna happen.
This doesn’t take a college degree to figure out the customer backlash over this.
Really stupid move.
I bought an iPhone X at 4AM CST on Friday. Yes, even with the $100 mark-up. Why? I wanted unlocked, no carrier involved. Apple required me to validate my Sprint account, even when buying outright. Best Buy did not. I also knew from past experience they would price match.
I called customer service today, they said I’d be getting my $100 refunded after my card was charged at shipping.
Mostly I’m amazed at how people have varied responses to what Best Buy has done. I was willing to pay the $100 extra for the ability to purchase unlocked (even if it does come with an unactivated Sprint SIM). We as consumers can make a choice as to whom we’d like to purchase from, or not.
I see no outrage for the individuals selling their X for a $500 profit on eBay, or criticism for those willing to pay the higher price. Its capatilism, and sellers can ask a price, the buyer chooses to validate the price with a purchase, or ignore it with hopes the price comes down.
…Oh good. Best Buy isn’t entirely insane.
‘Screw Thy Customer’ is still punishable by buyer’s revolt and the subsequent loss of a company’s reputation.
Too late for me. I shop at Best Buy as often as I shop at Walmart. I.E. as rarely as possible.
Plus, if you think this is bad, try returning electronics to worst buy for a 15% restocking fee. You losers that shop there deserve it.
A more accurate interpretation is poor iPhone X sales force Best Buy to reduce prices.