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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Marc Newman who wrote (21272)	12/18/1998 2:38:00 AM
From: HerbVic	Respond to of 213176

Marc, While waiting for Eric to respond to your questions, please allow me to inject my thoughts on the Best Buy price drop to $999. It really sounds like typical Best Buy on Macintosh fumbling. Management wanted to get in on the craze, albeit late. Then the computers sit alone on the display without even being turned on. Sales people either duck or try to divert customers to their favorite Wintel deal. Turnover report shows stock at or near the 60 day limit. Without leaving the office, management makes an executive decision and marks them down for clearance. It's also pre-emptive. It's the end of the year. Management knows that another product cycle is impending. Being the only retailer with an overstock, management decides to draw first blood. Best Buy is a retailer that runs on thin margins with tightly managed turnover. They will likely end up dropping the line as it is just a box sell with some peripheral possibilities. It couldn't possibly fit into their sell/support strategy without incurring extra costs, since it is the only Macintosh product they are carrying. HerbVic

To: Marc Newman who wrote (21272)	12/18/1998 2:43:00 AM
From: Eric Yang	Read Replies (3) \| Respond to of 213176

"Eric, what are your thoughts about this $999 deal at Best Buy? I wonder if Apple is really pissed at them right now." I don't think the price cut was Apple authorized (at least not yet) so I can't imagine Apple being too happy about it. The $999 price was not officially advertised in Best Buy's latest ads. In fact the price which appeared in previous ads seems to have been intentionally removed this time. They did change the sign displayed underneath the iMac at the West LA Best Buy to $999. Best Buy has been getting a lot of bad press lately because of the uncompetitive nature of its iMac pricing and marketing. I think the price cut was directed at CompUSA. And since CompUSA has a significantly higher inventory this kind of price war would affect CompUSA more than Best Buy. Most VARs and resellers I talked to were shocked when I told them Best Buy's new pricing. Many of them were still purchasing iMacs at wholesale pricing of $1150-$1180 range. A couple of sources told me that some high volume resellers (both international and domestic) have recently been able to purchase iMacs for $999 from Apple. But buying iMacs wholesale for $999 and selling iMacs at $999 are two different things. Under normal circumstances Best Buy would have to be able to buy iMacs for around $890 for them to sell at $999. I don't think Apple is selling iMacs at $890 so Best Buy is probably selling them at cost. Monish of MacNN told me that Fry's was actually willing to take a loss in order to compete with CompUSA and Best Buy. To some degree competitive pricing among Apple resellers is good for the consumer and Apple; however if Best Buy broke rank and undercut the MAP by $300 without Apple's authorization and preempting Apple's own price cuts, it can hurts the rest of the Mac market in the long run. If this price cut was indeed unauthorized (as it appears to be) there will be hundreds of VARs calling Apple tomorrow morning. It'll be interesting to see how Apple will respond to this. Would they formally announce the a across the board price cut on iMacs? There are only 8 more days until the end of the quarter so what ever Apple chooses to do, it probably won't impact this quarter's margin by much anymore. Eric

To: Marc Newman who wrote (21272)	12/18/1998 9:22:00 AM
From: syborg	Respond to of 213176

Customers who bought the iMac within the last month at Best Buy can go back and get a refund for the difference in the price they paid. I hate Best Buy for their service, but their price protection is top notch. OT: If you go to Best Buy to buy something that has a rebate associated often times you can the product for the price less the rebate price. IMHO this is due to a lack of skilled employees who update the price on the central computer to reflect a competitor's advertised price which is building in the rebate. But that's why I put up with the crappy service... automatic rebate, PLUS I can send in the rebate as well. Can you say double coupon? With any luck at all folks will take advantage of the rebate and pour the "found money" into other Apple products which would only help earnings. Good luck to all. syborg