Thursday, February 14, 2013

Apple’s Price Cut On Macs Shows What’s Going Wrong at the Company

From Henry Blodget | Daily Ticker: Only four months after launching a new laptop with a high-resolution "retina" screen, Apple has chopped $200 off the price.

Apple's 13-inch "Retina" MacBook Pro will now sell for $1,499 instead of the $1,699 original price.  This is a small move, but it's symptomatic of the broader challenges that Apple is facing.
The most likely reason for a price-cut so soon after launch is that the product wasn't selling well at the original price. And with the 13-inch MacBook, this would not be a surprise: Reviewers were underwhelmed with the laptop when it was released, arguing that, at $1,699, it was not a good value. Based on the price cut, it appears that Apple laptop buyers agreed.

The price cut reveals that consumers won't rush to buy the latest greatest Apple product just because Apple made it. The price-value tradeoff has to be reasonable. And in the case of the MacBook Pro, it apparently wasn't.  This problem--the price-value tradeoff--has become an issue for Apple far beyond laptops…

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