Economy likely to steer Apple towards lower priced MacBooks

Quincy Pince-Nez
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September 29, 2008
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Let's face it, the US and to a lesser extent the global economy is a shambles right now.  People are spending less because they have less disposable income.  Morgan Stanley and other analysts are pointing to that reason and by extension consumer product ordering drops for bringing Apple's stock price targets down.  While the wider market is also down AAPL is down over 15%, the lowest price it has seen in over a year and its biggest percentage drop in over 8 years.   Some people think this might be a good time to buy, others think it has further to drop.  If it means anything the analysts in question have an extremely poor record on Apple forecasts..so says Philip Elmer DeWitt of Apple 2.0.

Apple, in its latest earnings call, forecasted a need to cut margins...

Will this lead to some very low margin MacBooks?  We think so...even though Apple, as a rule, doesn't like to play in the low margin, highly competitive low end market.  

At the earnings call, Apple also said that they had innovated in ways that their competitors couldn't touch.  Perhaps that innovation was in production of a laptop at low cost having very few parts.

We'd like to see MacBooks that line up with Mac Mini pricing.  That might help out the stock price, right? 

Comments (8)

Jimmy (not verified) | September 29, 2008 - 2:37pm

Dude. Buy Apple! I never dreamed it would be this low...I don't own stock but it is a bargain at this price!

disclaimer: I am house poor

9to5Mac Noob (not verified) | September 29, 2008 - 6:17pm

between 40-60 is a bargain, just read the charts :)

crtaylor (not verified) | September 29, 2008 - 8:21pm

They really should lower their prices. Apple has just been jacking the price up hoping everyone would buy based on just the benefit or even the look of their products. I, for one, would like to see the iMacs go below $1000. There is especially no reason for the Mac Pro to be as expensive as it is.

As people-friendly as Macs already are, you'd think they would be wallet-friendly, too.

9to5Mac Noob (not verified) | September 29, 2008 - 9:20pm

The thing is steve pretty much has a monopoly on a couple products right now. 6 months ago (when they first switched to 8 cores standard the price was $2000. Since thier is no other consumer pc that gets even close to the performance of it, let alone the price, steve jacked it up $799. Really, they have the best product in all in one PC. (except for the new one that came out that costs $400 more), high performance pc (even alien wares dont compete with the raw power it has), and phone business (my personal opinion). As long as they have no real competition steve can do what ever he wants with the prices. Just remember competition is good for the consumer.
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I just switched to mac btw

9to5Mac Noob (not verified) | September 29, 2008 - 8:21pm

yeah, I jumped in when it was around $65. I'm debating dumping it, but if I was going to do that I should have done it in December of last yeah. I hope it will come back up, but I don't know if the consumer season will treat the stock prices as well as it did last year.

Fat Phil (not verified) | September 30, 2008 - 1:58am

Analytics and risk assessment modeling, which are responsible for the wider crisis at hand, not just Apple's share price fandango, are seriously flawed and shouldn't be followed by anyone who cares about their investment.

Nobody on the planet can assess a market like we have today, nevermind predict how it will look in X months time, considering how connected it is: it's much worse than spaghetti.

Use your gut; it's your best friend and the product of millions of years of evolution.

DocMacPS (not verified) | September 30, 2008 - 9:15am

Apple simply cannot continue to sell a low-end basic MacBook for $1100 in the face of $499-$829 Windows laptops with comparable specs. So bring on the price-cutting!

AdamC (not verified) | September 30, 2008 - 9:16am

Wrong, lower price means low margin means lower profits means more hammering by these anal ysts... correct me if I am wrong.