Apple Black Friday Sale Seeks Recovery From September Swoon

By Wayne Rash  |  Posted 2011-11-25 Print this article Print

News Analysis: Apple was clearly unsettled when iPhone sales dropped sharply in September as customers waited for the iPhone 5 that never came. Surprise Apple Black Friday discounts may be aimed at recouping that lost September revenue and protecting its market share.

In a move that has surprised many, Apple has announced in advance that it will have a sale on its rarely discounted products the day after Thanksgiving in the U.S., otherwise known as Black Friday. Normally, the only time Apple reduces prices on its products is immediately before a new version of the product is about to come out-so that it can clear inventory-and after the new product arrives, as it did with the iPhone's older models.

But it's not just Apple that's reducing prices on iPads, iPods and related items. Retailer Microcenter is advertising iPads for a $50 discount in its newspaper ads (but not online). I haven't done an exhaustive search since I don't plan to buy an iPad on Black Friday. (I already have one.) But the discounting by Apple and major retailers is a strong indicator that Apple is concerned enough about keeping its market share intact that it's reducing the price on its most in-demand products, and letting its authorized retailers do the same.

This should be no surprise to Apple customers. When the word got out late this past summer that Apple would be introducing its long-awaited iPhone 5 in early October, sales of the iPhone 4 dropped significantly. In fact, the drop was so great that Apple temporarily dropped its leadership position in market share. Clearly, the company doesn't want this to happen again.

To protect against what I've started calling the "September Effect," Apple is taking moves to keep its market share up, and its competition on the ropes. This is especially important in this time at the beginning of the Christmas shopping season when many companies make their biggest profits of the year. This year is especially important because Apple has a lot of competitors, at least in the laptop and tablet markets.

It's in the tablet market where Apple faces the hardest market share fight. Both Amazon and Barnes & Noble have started selling e-readers that look a lot like tablets. In addition, Samsung has introduced a new version of its Galaxy Tab that competes directly with the Apple iPad. And, of course, there are about a gazillion Android tablets out there soaking up consumer dollars.

While the e-readers from Amazon and Barnes & Noble aren't tablets in the same league as the iPad, they are competitors in the sense that shoppers, who might have purchased an iPad as an e-reader, will now decide the new Kindle Fire or Nook Color will do just as well for less money. The tablet-like e-readers are really aiming at a separate market from the iPad, but they still cost half as much, and fill some of the same needs.

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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