The hidden story from Apple’s WWDC

Unless you’ve been assiduously avoiding the news lately, you probably heard that Apple announced a new iPhone model yesterday at their World Wide Developer Conference (WWDC), along with updated laptops and various software updates. Most of the news coverage focused on these items, but the real story was buried.

For the first time in years, Apple shifted their laptop price points. Unlike most PC makers who manage configurations, and adjust prices over time to track the inevitable decline in the value of silicon, Apple manages price points, and updates the components over time to maintain perceived value. Apple’s entry-level Macbook Pro notebook has started at $1999 since it was introduced in 2006. Apple dropped $300 to $1699 yesterday (along with some component changes). The mid-level and high-end 15″ MBP’s dropped $500 to $1999 and $2299, respectively. The 17″ MBP dropped $300 to occupy the $2499 slot. 13″ Macbooks were rebranded with the “Pro” moniker (and received some component upgrades), while dropping $100 in price.

This indicates that while Apple is weathering the recession well, they are adjusting to changing value equations in the market. Apple hates dropping price points. (One could also argue that there aren’t enough compelling upgrades to justify keeping the prior price points.) However, these adjustments will boost sales significantly and dropping component costs mean that Apple won’t take a margin hit.

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