To say Apple’s launch of its first wearable has been out-of-character for the usually steady company would be an understatement. From a convoluted rollout to messy software updates, it was a bumpy first few months for Apple Watch. Now we’re coming up on the 3rd quarter of its availability and although inventory levels have settled and most early bugs have been squashed, Best Buy has just hit it with a massive $100 price drop across the board.
That’s the first full $100 price drop we’ve seen though both Target and B&H offer $100 in combined discounts and gift cards. For the smaller 38mm Sport model, that’s a discount of nearly 30%. In years’ past Apple products were almost never discounted at all, let alone a relatively new, hotly-anticipated gadget like Apple Watch. One outlier is the original iPhone that received a swift $200 price cut.
Apple most certainly has a say as to whether or not a major retailer like Best Buy can discount Apple Watch. So what gives? Is this Apple acknowledging that it overpriced Apple Watch for the market? Is Apple feeling the heat from low-cost alternatives, especially since Android Wear is now compatible with iOS? Or maybe demand has been sagging and this is Apple’s way of trying to jumpstart sales? Perhaps Apple would like to clear out inventory now that a new model is expected in March.
There’s no way to know for sure, but it’s certainly an interesting turn of events. There’s no doubt Apple has loosened its typically tight grip on pricing, but if relatively slow growth is any indication, there may be more to it than that for Apple Watch.
Big discounts haven’t been limited to just Apple Watch this holiday season either. Over at 9to5Toys we’ve seen the brand new Apple TV with Siri go 25% off, iPad Air 2 regularly available for $100+ below retail, and even iPhone 6s has received several substantial promotions. It’s possible that this pricing strategy is part of Apple’s plan to outsource discounting to authorized resellers. No matter the reason for more frequent Apple product discounts, it’s a win for consumers and a welcome relief for holiday shoppers
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Apple would like to clear out inventory now that a new model is expected in March.
This has to be the dumbest and most uneducated trolling comment I have ever seen on this site. What evidence do you have that Apple has wanted to clear out stock in the past?
Are you referring to your post? Apple authorized dealers have had $0 iPhone sales when the oldest model was being discontinued. Macs and iPads see frequent discounts too. The biggest difference here is that the Apple Watch was released in the spring, not the fall, so the timing of the sales would be different. That said, it’s too early to clear out inventory. Apple simply doesn’t keep months worth of inventory. If watch sales were really poor, they’d simply lower production, not the prices. Numerous reports suggest the Apple Watch is selling quite well (at least by the standards of other companies) with only the much less expensive Fitbit beating Apple out on unit sales. I’m going to suggest a simpler reason for the steep discounts: Apple’s profit margin is higher, so they are comfortable with steeper discounts. On top of that, it’s a device that locks you into their breadwinner: the iPhone. Sales likely aren’t has high as Apple wants, but that shouldn’t be mistaken with “low.”
These same retailers have consistently discounted Apple products around the holiday buying season. The watch is just the latest product which also happens to be something that might entice you to buy multiple bands/accessories. I’m guessing those official bands cost roughly a dollar for Apple to manufacture and I don’t see too many of them being discounted lower than the $50 msrp.
I wish we had a retailer in the uk that would give us a massive discount on the Apple watch.
I would love to know what Apple would do with the 1st generation of Apple watches when they release the 2nd generation. Its ok with the iPhone by reducing the prices. With Apple Watch having 3 types of watches and all sorts of bands going with them, it would just make all the pricing all over the place!
I’m sure the charger and bands will fit the next model. In fact I imagine the next Watch will look identical but with improved internals. Camera, gps hopefully.
Gotta hit those sales projections one way or another
Are there any discounts in the UK? I often read jealously about the discounts available in the US …
One thing that may be happening is that apple is realizing that their margins for accessories are incredibly high and given the nature of the Apple Watch and the owners tendency to purchase multiple bands, it would seem apple may be finding a new, possibly more profitable pricing model.
I take a look at how much apple is charging for the silicone case (back cover) for the iPad pro and all the other iProducts and see this as evidence of that being the case. The biggest difference between the iPad and the Apple Watch is that the Apple Watch is just as much a fashion object as it is a piece of technology. They have it in several variants of gold for f$&ks sake.
Get the product in as many hands as possible, get as many boyfriends to buy one for their girlfriends as possible, and we’ll make more than enough to offset the discounted sale price of the hardware. Heck, we’ll sell a gazillion different colored rubber sports bands for $50 a piece. MWAHAHAHAHAHA
That and as the watch scales, component costs sink quickly, particularly on the sports model, and they can lower the price and keep in line with their product launch margins.
Mr. Cook is on the hot seat. Why? The reason why a company produces products is to make a profit, right? The Apple watch sold directly by Apple bears the highest profit, third party retailers load their profit between the wholesale price they pay Apple and the retail. This third part retail scheme, for sure was not built into the BOM cost VS. retail formula. To then add in the $100. discount, near ALL the profit for either Apple or Best Buy goes away. There is no accrual to hide this from financial reports and share holders. The Apple groupies who blather on and on about this, can’t see that this product is in trouble.
All the data suggests the Watch is a success and is ramping up faster that the first iPhone. Considering it’s not as revolutionary as the iPhone it sounds like a slam dunk.
What makes you think it’s “in trouble”?