5 ms·

I was scratching my head as to why Mac and iPad sales would’ve shot up 30% YoY. Then saw that two weeks before end of quarter they started a “back to school” p

by xoxoy 6y ago

I was scratching my head as to why Mac and iPad sales would’ve shot up 30% YoY. Then saw that two weeks before end of quarter they started a “back to school” promotion (in June?) that throws in a free pair of AirPods with a Mac or iPad purchase. Details here: https://www.apple.com/promo/pdf/EN_US_BTS_FY20_TandCs.pdf https://www.apple.com/promo/pdf/EN_US_BTS_FY20_TandCs.pdf With a $479 iPad Air that’s 33% of the price of your purchase. New Apple products can easily be sold on Amazon or Ebay for close to face value, so this is a extremely easy and generous retail arbitrage opportunity. My point is I didn’t see any language around this promotion in their earnings report but suspect because it is so generous that both legitimate customers and resellers are taking advantage of this deal, thus disproportionately lifting sales for Macs and iPads vs other categories like iPhones which was essentially flat YoY. Their surprise beat was then in part influenced by this big promotion and not necessarily totally organic demand... Edit: They do something like this every year but this one started in Q2 unlike last year in Q3 and includes much cheaper iPads, and is for Airpods for the first time (a much more desirable freebie over Beats)

kss238 6y ago
This promotion happens every year before schools starts. I received a free pair of beats headphones with my iPad purchase in 2018.
- xoxoy 6y ago
  I checked 2019. That promotion started mid July (so after Q2 ended), and was for Beats only with a mac or iMac which start at > $1000. my point is this started before Q2 ended and includes much cheaper iPads. Again, this gift is 33% of the cost of entry level iPad Air. Also Airpods are much more broadly desirable than over the head Beats. 2019 promotion: https://www.apple.com/newsroom/2019/07/macbook-air-and-macbook-pro-updated-for-back-to-school-season/ https://www.apple.com/newsroom/2019/07/macbook-air-and-macbo...
9nGQluzmnq3M 6y ago
But AirPods have to be close to free for Apple to manufacture. Functionally equivalent clones retail for under $10 on AliExpress.
- xoxoy 6y ago
  Ok - that doesn’t change my point? It just means they can offer a very generous promotion without incurring a big promotional expense that cuts into profit margins.
  - TheSpiceIsLife 6y ago
    Right, which makes your comment pointless. Apple’s raison d'etre is to make money.
    - xoxoy 6y ago
      what? I was trying to understand why Mac and iPad sales surged YoY compared to other products and I’m just saying I think it was in part due to this promotion, which started earlier than in past years and included Airpods for the first time. I don’t understand why it’s a pointless exercise to theorize why sales went up when no one expected it otherwise
- stu2b50 6y ago
  This is wrong in two ways. First, the 10 dollar clones are ass, if you've ever tried one. Second, what the material cost is doesn't matter, at least on its own--a gifted airpod is one that's not sold. The opportunity cost is real, even if the material cost is low.
  - 9nGQluzmnq3M 6y ago
    I agree, but that doesn't make my actual point -- that manufacturing AirPods is cheap -- wrong. FWIW, I did buy a $10 clone. The hardware was actually astonishingly polished for the price point, but the software to control it was indeed "ass".
  - deleted 6y ago
    [deleted]
foobarian 6y ago
It's because of Covid. Millions of kids needed something to call into their Zoom classes and iPads for one are perfect for that at their price point. I'm not surprised at all.
- xoxoy 6y ago
  yeah that could be part of it too. i have no insight into how families with young kids decide on computer purchases for families to be frank. and i don’t know if public schools provide laptops for home use either, but if everyone is at home then you’re going to need a device for every kid in school if not otherwise provided.
  - boogies 6y ago
    > i don’t know if public schools provide laptops for home use either In my area of Maryland they do, and anecdotally I think they also have in at least one part of Utah. But in my area they emphasized that they were for those with the greatest need, not everyone.
jklein11 6y ago
Where do you see the 30% YoY increase? This statistic is pretty useless if it is on a per units sold basis.

by xoxoy 6y ago

kss238 6y ago

This promotion happens every year before schools starts. I received a free pair of beats headphones with my iPad purchase in 2018.

xoxoy 6y ago
I checked 2019. That promotion started mid July (so after Q2 ended), and was for Beats only with a mac or iMac which start at > $1000. my point is this started before Q2 ended and includes much cheaper iPads. Again, this gift is 33% of the cost of entry level iPad Air. Also Airpods are much more broadly desirable than over the head Beats. 2019 promotion: https://www.apple.com/newsroom/2019/07/macbook-air-and-macbook-pro-updated-for-back-to-school-season/ https://www.apple.com/newsroom/2019/07/macbook-air-and-macbo...

9nGQluzmnq3M 6y ago

But AirPods have to be close to free for Apple to manufacture. Functionally equivalent clones retail for under $10 on AliExpress.

xoxoy 6y ago
Ok - that doesn’t change my point? It just means they can offer a very generous promotion without incurring a big promotional expense that cuts into profit margins.
- TheSpiceIsLife 6y ago
  Right, which makes your comment pointless. Apple’s raison d'etre is to make money.
  - xoxoy 6y ago
    what? I was trying to understand why Mac and iPad sales surged YoY compared to other products and I’m just saying I think it was in part due to this promotion, which started earlier than in past years and included Airpods for the first time. I don’t understand why it’s a pointless exercise to theorize why sales went up when no one expected it otherwise
stu2b50 6y ago
This is wrong in two ways. First, the 10 dollar clones are ass, if you've ever tried one. Second, what the material cost is doesn't matter, at least on its own--a gifted airpod is one that's not sold. The opportunity cost is real, even if the material cost is low.
- 9nGQluzmnq3M 6y ago
  I agree, but that doesn't make my actual point -- that manufacturing AirPods is cheap -- wrong. FWIW, I did buy a $10 clone. The hardware was actually astonishingly polished for the price point, but the software to control it was indeed "ass".
- deleted 6y ago
  [deleted]

foobarian 6y ago

It's because of Covid. Millions of kids needed something to call into their Zoom classes and iPads for one are perfect for that at their price point. I'm not surprised at all.

xoxoy 6y ago
yeah that could be part of it too. i have no insight into how families with young kids decide on computer purchases for families to be frank. and i don’t know if public schools provide laptops for home use either, but if everyone is at home then you’re going to need a device for every kid in school if not otherwise provided.
- boogies 6y ago
  > i don’t know if public schools provide laptops for home use either In my area of Maryland they do, and anecdotally I think they also have in at least one part of Utah. But in my area they emphasized that they were for those with the greatest need, not everyone.

jklein11 6y ago

Where do you see the 30% YoY increase? This statistic is pretty useless if it is on a per units sold basis.