As we mentioned in an earlier post one of the defining events of this year’s Black Friday promotions was the active participation of Apple and its core product lines (iPad, iPhone, and MacBook). Almost every major Apple retail partner was offering considerable savings on a range of Apple devices, in ways that we have infrequently seen, and Apple has rarely permitted. Putting aside the silly question of whether a gift card with purchase is really a discount (it is and it is seen that way by the consumer who are pretty self-aware about those type of Jedi mind tricks) there were real and substantial savings on the entire Apple line-up. And the question is, why now? And to what purpose?
Since the launch of the iPhone 5s and 5c, and the iPad Air, Apple has seemingly shifted its pricing standards. Almost since day one the iPhone 5c has been available for less than its $99 strike price, and once availability cleared the iPhone 5s has been at $10-$20 below its $199 price point. With the iPad Air the discounts took even less time, with the Air showing up almost everywhere at $479 very close to launch. All this discounting suggests a tacit level of approval from Apple, especially when it is implemented by big partners like Best Buy, Walmart, and Target. Those price cuts, however, were likely just approved by Apple and not encouraged, or financially supported by them. Advance to Black Friday and we see these prices again, oftentimes in ads and almost always with gift cards attached to them, reducing the price by one-third in some cases or even taking it below zero. And with every retailer promoting these for Black Friday it seems likely that Apple is at least partially supporting these price moves.
With a dearth of great product(outside of TV) available for Black Friday Apple seems to be making a statement that we can control the tone and promotion of our products, even on the most hyped holiday buying day and still offer the discounts that will allow us to grow and accelerate our market share. Discounting like this is almost always done with a market share purpose in mind. And with Apple’s products and its dominant U.S. shares under attack this was the right day, with the right products (the Air, the Mini and the iPad 2) to counter the growing push from other brands and products into Apple’s space.