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Business/Finance See other Business/Finance Articles Title: There Go Apple's Margins: iPhone 5 To Sell At Wal-Mart For A Third Off Original Price Remember when less than brisk sales of the iPhone 5 after it was first unveiled (to the usual fawning media Borg collective ooh-ing and aah-ing) were blamed on "supply issues" even as "reputable" Wall Street analysts conducted channel checks which foretold of epic holiday sales and massive pent up demand. As it turns out the only commodity in short supply was, well, demand, particularly that coming from consumers, very much as we predicted during the last earnings report (which was merely the latest consecutive earnings miss in a row). And, as Reuters reports with its Friday night bombshell report, Apple has finally thrown in the towel on pretending there is a supply shortage and admitted there is simply not enough demand at the given price point, by proceeding to sell the margin flagship iPhone 5 at a third off the original price, at the bargain basement commodity expert Wal-Mart of all places. And not only the iPhone, but the Ipad too (we have no idea which generation is the latest one: the iPad 3, the New iPad, the iPad 4s, the iPad Mini, the MAXiPad, etc...) And just like that, the "niche premium" magic of the once uber-cool gizmo is gone, not to mention AAPL's profit margins, very much as the stock price has been sensing over the past two months, during which time it lobbed off some $150 billion in market cap. And with the reflexivity of fad-ness, as long as the price of the stock is soaring for whatever reason, interest and demand in the product remains at virtually any cost. Sadly for AAPL bulls, the opposite is also true, as is being witnessed right about now. Alas - as with every fad, the time has once again come to find the new latest and greatest distraction, one with just as ridiculously unsustainable a growth curve. From Reuters: Wal-Mart said it is selling the 16 GB Apple iPhone 5 for $127, versus an original price of $189.97. The price is valid with a two-year contract from wireless carriers Verizon, Sprint and AT&T, the retailer added. Wal-Mart said it is also selling the 16 GB iPhone 4S and the 16 GB iPad with Retina display and WiFi at discounts. The offers will be available for 30 days in about 3,000 of Wal-Mart's stores, which were not identified. They are not available online, according to the retailer. Apple has focused on high-priced, premium gadgets for many years and has strictly enforced its prices with retailers and other distributors. However, a Wal-Mart spokeswoman said on Friday that the discounts were arranged with Apple. "We worked together with them on this," the spokeswoman, Sarah Spencer, said. "They are a great partner." Wal-Mart is pricing the iPad starting at $399, down from $499. Beginning December 17 the retailer said it will throw in a $30 iTunes card. Wal-Mart is selling the 16 GB iPhone 4S for $47, versus an original price of $89.97, it said. Apple did not respond to a request for comment. We wouldn't either. Poster Comment: The stock market was held up by Apple, Google and a couple other stocks plus Ben Bernanke. This market is going down. Got silver? Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: Horse (#0)
Apple jumped the shark with OS 10.7. Jobs had good timing, croaking when he did.
"Mr. Prime Minister, there is only one important question facing us, and that is the question whether the white race will survive." -- Leonid Brezhnev to James Callahan
Only Wal-Mart is offering this discount so I don't think it means much. The demand for the phone is still strong. Wal-Mart is just trying to get people in their stores to buy other things with this deal. Apple is having no problems selling their products.
God is always good!
Not making these deals available on-line confirms my suspicion that they are only offering the deals to get people into their stores to buy other stuff from them as well. Shorting Apple right now would not be wise. God is always good!
No biased reporting here. ;) God is always good!
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