Finding Holiday Discounts on iPods?

jeffy124 asks: "I was hoping to get an Apple iPod for Christmas. Alas, it's too expensive and out of the budget. So I'm forced into purchasing it for myself. Hoping to cash in on a holiday season bargain, I've been keeping my eye on the sales circulars that come in the newspaper. I've seen plenty of discounts for MP3 players of all kinds (Rio's, Dell's new HD-based player, etc), and the iPod has also shown up. Christmas does not yet seem very merry to me. They're always at the regular $299/399/499 price, never at a discount of any sort. You read that right, it's 'for sale' at the *regular* price. Stores guilty of this include Best Buy, Circuit City, Target, and CompUSA. Why do stores do this? How often? And does anyone know why Apple has been singled out while their competition has gotten their products discounted? Anyone know who *is* granting discounts on iPods this holiday season?"

"The other day came in the mail a 10% off coupon for various items at Best Buy, including 'MP3 Players' as indicated on the front of slip. Hoping this was how I was gonna get that discount, I set aside time this weekend to drive to Delaware in order to skip out on my local state sales tax too. I turned the coupon over, and in the legal disclaimer was the phrase 'Excludes Apple iPod Players.' Needless to say, a Merry Christmas is still aways off."

Comments

apple fixes the price

[websensei]

because they can. (boring).

next issue?

Re:apple fixes the price

[Anonymous Coward]

The parent got modded up as flamebait, but the statement is in fact true. There IS Apple price fixing for it's authorized resellers.

I work at an Apple Authorized Reseller in Los Angeles, and Apple has made it pretty clear that if we drop the price by more than $50, we aren't going to be an authorized reseller much longer.

Personally, I think it's terrible, because there is quite a profit made on Apple hardware by us, particularly G5 desktop systems, and iPods.

Basically, we could knock a good 74-100$ off the iPod without losing money. And I think if we did such a thing, we'd get a pretty healthy customer base very quickly.

Re:apple fixes the price

[raodin]

More than likely.. I think this has been true for a LONG time all across Apple's product lines. There's never been more than a $50 variance or so on Apple hardware, if you buy it new. Thats why resellers would generally try to sell your on extras. (like free memory, software, etc) Pretty much the only way to get discounts on new Apple hardware is educational/developer discounts.

Re:apple fixes the price

[penguinstorm]

Or Oakley, which regularly refuses to let its retailers discount its products; it occassionally happens, but is almost never advertised and the discount rarely exceeds 20%.

Patagonia lets retailers discount, but they generally have to:
a) notify the rep first
b) not discount stuff that they're told not to discount!

It's really a pretty common practice with high-leverage brands.

FWIW I was told - and I don't work the retail channel, so have no way of confirming this (but not reason not to believe it) that the profit on the CRT iMac (and probably the current eMac) was CDN$20

So while you complain about price gouging on the high end, remember the non-existent profit margins on the low. Keep in mind too that those customers buying the CDN$20 computers ('cause that's what they're worth to me) are the biggest pains - they're going to take forever to make a decision, ask you to explain why your iMac is better than a Dell at $50 less, come back regularly and ask questions which you think should be obvious.

So basically, you make no money off your low-end customers.

So I got no problem with Apple fixing prices and retailers making decent markups - as long as it's backed with reasonable warranties and decent products.

And there's where the iPod fails: 90 days is a joke, and a battery that's not changeable by the user is a travesty of epic proportions. Why anybody's buying this thing, I don't know.

But I want one...my precious.

Re:apple fixes the price

[YouHaveSnail]

From what I understand, Apple does essentially dictate the price. But not just because they can... after all, you'd think that if they could make the same dough per unit while consumers paid less, they'd do it, right? But it's more complicated than that, and there are a few reasons that keeping the price of a particular piece of hardware within a few bucks anywhere you go is attractive to Apple, and believe it or not, beneficial in some ways to customers.

First, many Apple products are high margin items for retailers. As long as that's true, plenty of retailers will carry Apple products, and Apple has a decent shot at increasing both market share and mind share. If Apple lets the price float, retailers' profits on Apple hardware suddenly drop close to zero, and few retailers will continue to carry Apple stuff.

Second, those high margins give Apple a lot of leverage with retailers. Apple needs to ensure that the way its products are presented reflect well on the brand. The "store within a store" concept that you see at CompUSA and others is one example of that. That all costs money. The high margins are Apple's carrot, and the threat of losing Apple authorized reseller status is Apple's stick in the effort to enforce its requirements.

Third, consistant pricing lets consumers buy without worrying that they're missing out on some great deal. If you want an iPod, you go out and buy one at whatever place you like the best or is most convenient for you. It doesn't matter (much) whether you buy at the Apple store or from Amazon or from CompUSA or Best Buy or Circuit City.

Fourth, most people perceive price as an indication of quality. A $300 music player must work better and do more than one that costs $130. (And in the case of the iPod, Apple can back this up: iPod is a better music player than the $130 model in every way other than price.)

Fifth, the market that Apple is clearly targetting with iPod is that segment that doesn't mind paying a premium for a device that works well. These are the same people that might next buy an iMac or a PowerBook or a G5. As much as iPod has been a big hit for Apple, I have to believe that its most important effect has been to introduce Apple to new customers.

What it comes down to is that dropping the margins on iPod gets Apple nothing but cheaper customers, less control over retailers, lower customer perception of quality, and less distribution. Why would they do that?

Re:apple fixes the price

[ssstraub]

And there's where the iPod fails: 90 days is a joke

The iPod now comes with a 1-yr warranty.

(I would rather it was a 3-yr, since it's a 300-500 device...)

Just wait...

[Cyno01]

Until they day after you buy one, Apple will annouce price breaks of $50-$100 and new larger capacity models.

Re:Just wait...

[rworne]

Then buy it via Apple or the Apple store. They offer a 14-day price protection policy for just this very reason.

BB, CC and their ilk will beat prices or match them. I have never had a problem getting them to match a price up to 30 days from the purchase date.

Blame Apple

[EricWright]

AFAIK, Apple is the one keeping prices up. If you look at third party Mac sellers, they will often give you a memory upgrade, HD increase, free accessories, etc., but almost never a price break. My guess would be that Apple exerts similar influence regarding price controls of other product lines, too.

If you want a cheaper ipod, your best bet is most likely going to be eBay.

"For Sale" does not mean "On Sale"

[BonrHanzon]

Just because it's listed in a circular doesn't mean that there's any sale price. We are just conditioned to believe that.
I haven't seen ipods for anything less than MSRP at any B&M either, probably due to the demand being so high.

Capitalism 101

[DoraLives]

Why do stores do this?

To make money.

How often?

As long as the market will bear.

Supply and Demand

[moehoward]

Supply and demand, baby. Deal with it. You don't WANT an iPod competitor. You want an iPod. Don't try to pass the competitors off as equivalent and then bitch about a price differece. Go buy the competitor if you don't like it.

Step 1) Create product
Step 2) Sell it at market price based on supply and demand
Step 3) Profit

It's so easy, even Microsoft can do it!

What about a refurb?

[Kranium]

Have you considered a refurb unit? Checkout the Apple Store and look for the big red "SAVE" tag on the left. I used a refurbished iBook for quite a while and it never gave me any trouble..

resellers are forced

[sublime]

I used to work for Apple, and I know first hand that Apple forces resellers to their pricing structure.. You won't find any apple products for less than they sell for at the apple store.

Re:Manufacturer's doing a deal

[Acidic_Diarrhea]

But a sale merely means that objects are being sold. "New sale price" means that I am selling a product for a new price. "Sale price" merely means that the cost of the product in my sale (which I have every day, as the operator of a store - hypothetically speaking) is this price. In fact, "new sale price" doesn't even imply that the price is lower than it was previously.

I think people forget that any time any person or business sells anything, they are having a sale. "Sale" has come to take on the meaning of reduced prices but I don't think people's inability to recall the original meaning of words needs to be legislated.

Apple price-fixes, but allows bundles

[SuperBanana]

Why do stores do this? How often? And does anyone know why Apple has been singled out while their competition has gotten their products discounted?

Because Apple does not allow you to sell Apple products below the pricing offered by Apple themselves.

Apple does, however, let you bundle things- so your best bet is to look for the best bundle(free case etc). Smalldog and MacConnection are among several catalog companies who regularly do these deals, because it's the only way to be competitive(and not a terribly good one, either.)

Do get a case; mine was scratched all over within a half week, and I was excruciatingly careful with it. Also, DO get an extended warranty, and DON'T GET IT FROM APPLE, it's shorter and MORE expensive than Best Buy's(for example.)

FYI- don't bother looking for an iTrip. I placed my order two months ago with Griffin and they have yet to ship me mine. It's getting cancelled tomorrow, I'm fed up of waiting, and I hear the FM adapters all suck anyway.

They don't need to discount...?

[frenetic3]

Wild conjecture, but maybe it's just because they have such a strong brand name (kid wants an *iPod* for xmas, not an mp3 player) that they feel that their product is unique and that sales wouldn't drastically increase if they cut their prices (or conversely sales wouldn't drop that much if they kept prices high, because their customers don't see the cheapo competing mp3 players as valid substitutes for an iPod.)

Kinda like toy fads -- what kid would want to accept a cheap knockoff "Fondle Me Herbert" doll when all their little pals have "Tickle Me Elmos"? :P

-fren

Re:Ebay?

[jest3r]

Ebay iPods usually go for around $250+ .. They seem to hold their value relatively well .. still you can save about $100 bucks.

- - redundant - -

[jafac]

It's called Minimum Advertised Price.

Apple sets it. You can't re-sell Apple products below this set level. Nobody can.
Yes, Apple has been sued for this. (not successfully IIRC).
In fact, Apple HAS successfully sued resellers for selling under MAP. They put some of them out of business - they were called "Grey-market" MACs, they were bought overseas, and sold into the US market. (some people ended up frying the power supplies because they were set to 240 instead of 120).

Other industries have also been sued for MAP, and gotten their asses handed to them. But since Apple is *NOT* a monopoly, they can get away with it. Don't like it? Buy a competitor's product.

Free iPod...

[supertbone]

if you buy a VW bug

Re:Price Limits

[DrSbaitso]

Sure, but because Apple doesn't have a monopoly on MP3 players, it's legal. If apple contacted all the other MP3 player manufacturers, and they agreed (in a smoke-filled room, no less) to fix the price of all MP3 players everywhere, THAT would be illegal.

This is the difference between vertical restrictions on price (i.e. Apple the manufacturer, and downstream retailers) and horizontal restrictions (all oil-producing companies and the price of oil).

This concludes the daily antitrust lesson :)

Price Control is a common retail practice.

[banks]

At the risk of being modded redundant, a more indepth explanation of this phenomenon:

What you are seeing is an example of "price control." Price control is a relatively common practice, especially for companies that create higher-end products and have limited (or no) direct-to-customer distribution. Essentially, Apple has the ultimate discretion as to which retailers it will sell iPods too. In order to qualify to carry an iPod, that retailer, be it Best Buy, Circuit City, or any other, must enter into a binding agreement with Apple as to the pricing of the unit. Under that agreement, discounting of the units is generally either completely disallowed, or allowed only with manufacturer approval. Thus, the Best Buys and Circuit City stores HAVE to sell the iPod at whatever price Apple tells them to.

Where it starts to get shady is when a retailer that hasn't signed a price control agreement with the manufacturer gets their hands on the price controlled units, and starts selling them at a price below the manufacturer's price point. This generally happens when a retailer that has an agreement with the manufacturer unloads some overstock or demo units, when a retailer goes bankrupt, or when a shipment "falls off of a truck." Many manufacturers that use price controls get very, very unhappy when this happens. Most price controlling manufacturers will cut off sales of product to retailers that sell overstock to discounters. This can lead to shady, under-the-table dealing, units with serial numbers ground off so the manufacturer can't trace who sold it to whom, and general malaise. Most manufacturers won't honor the warranties on items purchase through third-party discounters.

If you think Apple's price controls are nasty, take a look at the high-end watch world. Companies like Rolex won't even allow retailers to advertise the prices of their watches AT ALL. Take a look at a jeweler's ad in the newspaper for Rolexes- they'll always say something to the effect of "call or visit for pricing." Watch companies are also well known for forbidding internet sales. And they put out propaganda to the effect that all watches sold by discounters are counterfeit.

It's the manufacturer's world. We're just here to consume.

Re:Manufacturer's doing a deal

[Malc]

Oh come on, don't be so obtuse. We all know that a shop says it's having a sale to indicate that it's selling things at a discount from their normally selling price. In N. America, shops try to play on this with psychology by having continuous sales... they're trying to convince buyers that there's currently a discount and if they don't hurry they will lose out. Of course, as the sales seem to go on all the time, they're not really having a sale. The other sly practice is to rotate the sale through different items from week to week in the hope of catching a consumer by their unawares.

10% discount means $269 at Target

[ljavelin]

I bought a 10gb model at Target.

I signed up for the Target credit card and got an instant 10% off. That saved me $30 right there.

Then they gave me a smart card reader, and another 10% off my next credit card purchase, plus another 10% off any on-line purchase.

Wow. I'm done. It was easy, and to be honest I haven't used their card since. Maybe I'll start using it if my current "favorite" card continues to screw me with their crazy rules.

Two words: EDUCATION DISCOUNT

[Pyrosophy]

I bought mine and the same thing happened, but then I noticed my school's bookstore had it for 25% off. Apparently there is an education discount on these suckers.

So get yourself to your local college bookstore and either find an oblivious checkout clerk or contact a friend who has a friend who is still in college.

You save at least $40.

Re:Forget it, go for the Rio Karma

[BasilBrush]

To be the iPod killer, people would actually have top have heard of it...

Shop at Best Buy

[jonahark]

Check for iPods that are "Open Box." They are usually returned by someone who upgrades or downgrades size. They can't be sold as new, so must be marked down. Just bought a 20GB this past weekend - $339. Added in the 4-year Best Buy warranty for $40 to cover the battery and basically anything else that goes bad within 4 years. Also persuaded a fellow customer to take the iPod over the Nomad, even though it still cost him more and had a smaller hard disk. I don't think that Apple needs to drop prices to increase demand.

Re:Price Limits

[GlassHeart]

I think price fixing is dishonest in all circumstances (unfortunately not illegal in these cases) but to varying degrees. In this case Apple is further in the wrong in my book.

You are very ill-informed. One company setting a price for a product is not "price fixing". Other companies can and do compete against Apple's iPod with lower prices, so go buy those instead if you don't like the prices. Now, if Apple got together with Dell and Rio or whoever else, and conspired to keep prices at a certain level, then that's "price fixing" and it is anti-competitive and illegal. Secondly, if Apple is a monopoly in the market, they can also achieve the results of price fixing without conspiring with another company. A couple of months ago, Apple had about 30-40% of the market in terms of unit, and about 50% in terms of dollars spent. It is not a monopoly.

Similarly, BMW and Benz are not "fixing prices" just because their products are expensive. The are simply luxury goods, like $500 portable music players.

Re:Has no one said the more likely?

[Anonymous Coward]

I bought the new Blink182 CD at best buy for 10 bucks, but rememberd I wanted the Christmas Story DVD, too. It was also on sale for $20, but I don't know how much they were losing on that.

Blink 182 and Christmas Story. Dude - You are the loser here.

Re:Why an Ipod? There's a better alternative...

[phillymjs]

You can strap it to your arm with the included holder

I'm sure someone makes an armband-style case for iPod owners who want one.

No movable parts so no skipping unlike the ipod

The iPod has 32MB of cache. The average song encoded at a 128K bit rate is 4MB. So about 6 to 10 songs should fit into the iPod cache. I suppose skipping could become an issue for the iPod if you strap it to a running paint shaker and listen to it for a while.

The Ipod is overkill in terms of storage (The Iriver can hold 5-50 cds depending on the sampled bitrate but normally I'd say around 6-10)

Says you. I have a 30GB iPod, and I like being able to carry around my entire CD collection in my shirt pocket. No matter where I am, I can listen to any song I want, any time I want.

The Ipod is too big & heavy

The size of a deck of cards and the weight of 2 CDs is too big and heavy? Do you have severely atrophied muscles because you've been in a coma for the last 10 years, or something?

The Ipod battery fails after about 18 months and costs over $100 to replace

Lies, all lies. Some people have had battery problems, not everyone. The majority of people with original 5GB iPods who posted when this was brought up a week or two ago are having ZERO problems. And if $100 is too rich for your blood, you can replace the iPod battery yourself for $50.

The Ipod is just a notebook/laptop hard drive in a clean looking case but just as fragile as any other hard drive

I haven't read of anyone who has had issues because of drive fragility. People who are really concerned about it can buy a case. I prefer to just take good care of my stuff.

I've read nothing but excellent reviews for the Iriver mp3 player and own one and it's the best I've ever had.

I've read nothing but excellent reviews for the iPod, and own one, and it's the best I've ever had. Neener neener neener!

I don't agree with the argument that you get more storage for the same price from an Ipod. What's the use if it's overkill? If it was an external hard drive or something along those lines I'd agree but it's not.

Ummmm, the iPod is an external hard drive. You can store anything on it, you can even install an OS on it and boot from it. For someone who claims to have had an iPod, you sure don't seem to know much about them.

~Philly

Partner Links Through Amazon yielding discounts

[mgbastard]

A longtime mac bloggish site is linking to amazon, and offering actual discounts on a variety of apple hardware. Including the iPod.

Click on over to MacInTouch for a little bit off. It's linked off towards the bottom of the home page. It's not a huge discount, but the only one I've seen:

iPod 10GB: $284.05
iPod 20GB: $379.05
iPod 40GB: $474.05

I Just Asked Froogle

[Zastrossi]

I just asked Froogle, Google's product search engine, and it offered these results for a 40 GB unit. The best price on a new iPod it found was $464.00, which is about 10% off.

http://www.darrenbarefoot.com
Words. Words. Words.

Re: Finding Holiday Discounts on iPods?

[tdemark]

It's got replaceable batteries, and unlike the iPod, you don't have to remortgage your house to buy a replacement battery.

If you have to get a loan for $49, you probably shouldn't buy an iPod.

Or any MP3 player for that matter.

- Tony

Re:Price Limits

[DrSbaitso]

Actually, the contracts can specify selling only at MSRP. Stores can purchase iPods at lower prices, but Apple pulls their supply if it catches them discounting. They do this to assure stores a good profit margin so they spend their own resources advertising the product.

Say Best Buy sells an iPod for 399(MSRP), and Joe's DisKount ElectroniX sells it for 349 next door. Best Buy spends money advertising the availability of iPods, hires salesmen, etc. Joe is a 1-man shop with no ads, except for a big sign on their front window that says "IPODS: 349". They're located right next to Best Buy.

From Apple's perspective, Joe is freeriding off the efforts of Best Buy. Best Buy is pissed off because it loses sales to Joe from keeping it's retail price up, so it stops promoting the product and drops it's price. Apple is pissed off because no one knows about its product except for tech nerds who scour the internet review sites. Therefore, antitrust law tends to allow retail price maintenance in the absence of monopoly.

I think you're exactly right - the reason Nintendo got in trouble was because it colluded. I thought it was about the price of cartridges also, not about systems, but i could be wrong.

One company can't "fix prices"...

[danaris]

It appears, Dingleberry, that you have a disturbingly common misconception: that because only Apple makes Apple products, that makes them a monopoly. I will first give a relatively standard answer: does Sony have a monopoly because only they sell PlayStations? No. If Sony were the only company that sold gaming consoles, or held a supermajority of the market, and they actively fought to keep it that way, then they would be in a monopoly position. If Apple were the only company that sold MP3 players, or held a supermajority of the market, and actively fought to keep it that way, then they would have a monopoly and your position would be reasonable.

The other difference is that between monopoly pricing and price fixing. The former can only be done by a monopoly that holds a supermajority of the market in a particular commodity (a single company). The latter can only be done by what is commonly known as a cartel, a group of companies in the same industry that get together to decide what the price of the good or service they all sell should be. If they collectively hold enough of the market, they can keep prices as high as they want, because the competition cannot make enough of a dent in their market share to really compete.

You can be sure that even if the market share of the iPod dropped from its current level of (I believe) about 80% down to 40%, Apple would not lower the price by a significant amount. This is because Apple doesn't keep the price high to gouge us or because they're a monopoly, they do it because that's the kind of company they are: they make expensive, high-quality, high-profit-margin items that people buy because they're the best, not because they're the most affordable. In other words, they're not a monopoly, and nor are they trying to compete on the same footing as companies like Dell and HP, which always compete on price. They compete on quality, instead.

They're worth it.

Dan Aris

You missed the point...

[Dascen]

Then buy it via Apple or the Apple store. They offer a 14-day price protection policy for just this very reason.

I think you missed the point. If you got the 14 day price protection, the price would drop on the 15th. Thats how it works.