Why Apple’s new Back to School deal is good business

16 Comments

Apple (s aapl) has unveiled its Back to School promotion for 2011, and it’s . . . different from what it has been in years past. Rather than a free iPod (or a $200 discount on iPods costing more than that), as Apple has previously offered, this year, when you purchase a new Mac with education pricing, you get $100 credit for use at the Mac App Store, the iOS App Store, the iTunes Store or the iBookstore. Yay?

Looked at it purely from the perspective of monetary value, this year’s deal is definitely less of one than what Apple has offered previously. So why is Apple getting stingy with the rebates when it appears to be at its most successful?

First, it’s possible Apple doesn’t need the back to school bump anymore. Education used to be Apple’s bread and butter, but lately the Mac maker has been reaching a much broader audience, thanks to sales of iOS devices and the halo effect those are having in other segments. Apple might also just have found that it no longer needs to use Macs to move excess inventory of iPods ahead of the usual fall refresh, if they’re selling well enough on their own. Or possibly, it’s shifting all of its product update cycles, since the iPhone didn’t get a June update this year. If there’s no new iPod touch in September, Apple doesn’t have to get rid of its existing stock between now and then.

Apple is also cutting margins elsewhere, so it may need to make up for that by lowering the overall value of this year’s discount. Lion will now be distributed exclusively via the Mac App Store and will retail for only $29.99 for a copy that can be used on all computers authorized for use with your iTunes store account. Snow Leopard, by contrast, costs $29 for a single upgrade license, while a five-user family pack costs $49. Apple also separated out the apps from its iLife and iWork suites this year, making them available for cheaper as individual apps on the Mac App Store. As Apple continues to drive down the price on its software offerings, hardware margins become even more important as a source of revenue.

Finally, consider that in the past few years, Apple has gone from a computer company that also sells mobile devices to a mobile device company that also sells computers, and now potentially to a cloud company that sells hardware to leverage that ecosystem. If the hardware platform is no longer the center of Apple’s universe, it stands to reason that it would offer a promotion that doesn’t emphasize one aspect of its hardware business over another.

Personally, I’ve got plenty of iOS devices, but one thing I can always use more of is software for those gadgets. I think Apple is thinking that most of its Back to School Mac buyers will be in similar circumstances. Plus, $100 gift cards are a nice way of giving the Apple development community a little boost. What do you think? Are you on board with Apple’s latest promotion or not?

16 Comments

John

Apple is the company with the highest profit per employee in the world and they still make their employees pay for lunch in the employee cafeteria. It’s just “we think we can get away with getting more money and so we will.” it sucks but it’s what Apple does–and what other companies would so if their products were good enough to get away with it.

Mirror Ginger

This gift card absolutely a RUBBISH.
For the people who do not have an ipod touch, i don’t think they are willing to spend $200 to buy a ipod touch in order to “enjoying” the “$100 gift card”.
On the other hand, people who have an ipod touch, i don’t think they will care about the money spent on buying APPS while they have the choice.
So, the gift card definitely USELESS for those users. This gift card concept SUCKS!!!
In my point of view, if Apple is not letting the free ipod touch out, at least giving consumers a satisfactory discount for buying it.

Jet

I’ve had my macbook pro for about 6 years now and the year I decide to wait for summer to upgrade so I can get an iPod touch with it, they decide to do this stupid offer.

I’m pretty upset about it. I am now debating wether I should wait for this campaign to fail until next summer so I can get that iPod touch for free.

Tim

Yeah, I’m pretty angry. My iPod touch has had a cracked screen for the last 6 months, and I have been wanting to upgrade my MacBook Pro because its from 2008 and not running as well as it once used too, and I’ve been specifically waiting for the back to school promo so I can get the free iPod touch, and they offer me a measly $100 for the app store? I get it, students need apps, but offer the iPod touch, or $200 to the app store, or even $150. $100 is not that much money, especially when they have been giving away $229 iPod touches for the last few years, and when Microsoft is giving away Xbox 360s. Very disappointing apple. Very disappointing.

Levi

I could see why it is smart from Apple to do this. But I feel cheated a bit. I preferred my $230 value over $100. This is especially since I really have no use for the $100. Maybe if I could cut it up into a few Lion upgrades within the family, but I probably cannot. Had I not bought Aperture, I could at least find it useful. But I did buy already. Money already spent.

Now if Apple offered the $230 discount on an iPad or an unlocked iPhone I would have one before the end of the promo. (It also would mean that I’d stop using an Android device.) But Apple apparently does not want me to do that :)

craig

wtf this is so ridiculous. I feel like I’m reading brain washed apple customers. I love apple products but this is another way for them to cheap out. The two-hundred dollar ipod touch was either a great extra gadget or 200 dollars. The app store is just apple saying- give us this fake money back that we pretended to give you.
Ridiculous… if i was a student i may consider a pc….. just out of spite

pjs_boston

With OS X Lion and the new Sandy Bridge/Thunderbolt MacBook Airs in the pipeline, Apple doesn’t need to stimulate demand for Macs this back to school season. There is a huge amount of pent up demand for faster Airs that will be compounded by the excitement over Lion.

Giving out iTunes gift cards is nice little incentive (better than nothing) and a great way to get new student Mac owners hooked on the Mac/iOS App Store. I wonder how many downloads of Pages and Numbers will result? Ouch MS Office!

Justin Vance

I’ll pipe in on this one in agreement with those above. I typically upgrade every year around the education discount. This year, regardless of how sweet the deal for Apple, the value in the discount is drastically diminished. I’ll definitely reconsider my hardware upgrade unless something changes. :( …

What college student wouldn’t prefer a X-Box over the gift card?

If the average college student walks into BestBuy and has a decision… It doesn’t look good for Apple.

If Microsoft is looking to make up ground with that particular demographic, this may be quite the opportunity.

Ali Khan

This is really stupid!

All I have been waiting for this promotion, to get the ipod touch (or discount on ipad)… how this deal is better? I dont get it? we used to get $229 for ipod touch and now we are only getting $100 back? I think apple should have give choice 1). if customer prefers to have ipod touch 2). other customer prefers to have the $100 gift card.

I love apple products but this is the worst deal ever :(

apple will have to fix it next year when they will see the slow down in MAC sales. Considering that I will not buy a computer this year due to this reason…

BuzzIT

I think its a brilliant business move by Apple. It will be a big boon for the developers. Only the customers like me have lost out. I was waiting for the bac to school offer (as well as hoping that Apple will discount on iPads :) ). This year even microsoft had upped the ante with a free Xbox. Disappointed and not planning to buy now :(

Cold Water

Don’t take the bait unless you need a new Mac. You’ll easily save $100 just by waiting a few more months. As a bonus, you can spend it on whatever you want.

Rick Ianniello

It’s brilliant when speaking on the behalf of others and for Apple. For me, I was anxiously awaiting a new iMac and then putting the $200 toward an iPad. I hadn’t planned to buy $100 worth of apps and even if I did, it’s still $100 less in my pocket.

One no vote.

Aman

It’s a marketing plan and It’s stupid…

Most of the students who buy macbooks would diffidently prefer an iPod touch over a $100 gift card they might never use. Most of the people I know who has a mac either don’t buy any other apps or only buy Microsoft Office. Besides, I am planning on spending $370 on apps that are not in the app store.

If you don’t need the iPod, you could sell it and use the money to buy ANYTHING including apps and will still be a better deal since iPod touch value is $200 in its new condition. Who will buy $100 credit for $100? and If you find that person you will pay to ship it anyway.

Face it, this deal sucks compare to the old deal and sucks even more if you compare it to Microsoft’s free xBox deal.

Don’t get me wrong. I love apple product and their quality. I am just not one of those guys who worship apple and try to convince others that whatever apple is doing is in your best interest. This deal is only to boost their electronic stores. It’s not that they can’t provide free iPods since they already did in Japan and Australia. They even delayed the deal for a couple of months just to let their new Lion users be the first to take advantage of this deal. It’s not about YOU as a customer and what you want. It is about APPLE and what they want

Aman

It’s stupid…

Most of the students who buy macbooks would diffidently prefer an iPod touch over a $100 gift card they might never use. Most of the people I know who has a mac either don’t buy any other apps or only buy Microsoft Office. Besides, I am planning on spending $370 on apps that are not in the app store.

If you don’t need the iPod, you could sell it and use the money to buy ANYTHING including apps and will still be a better deal since iPod touch value is $200 in its new condition. Who will buy $100 credit for $100? and If you find that person you will pay to ship it anyway.

Face it, this deal sucks compare to the old deal and sucks even more if you compare it to Microsoft’s free xBox deal.

Don’t get me wrong. I love apple product and their quality. I am just not one of those guys who worship apple and try to convince others that whatever apple is doing is in your best interest.

Brad

Everything I’ve seen lately points towards Apple “forcefully” leveraging the Mac App Store to give it more prominence. The only reason for Lion exclusivity to the MAS is to boost MAS sales. This will only do the same.

At next year’s WWDC, I can almost guarantee that Apple will be boasting about the popularity of the MAS. The upgrade to Lion and/or the $100 gift card to the MAS will familiarize people with it who may have never looked at it before, and introduce them into the ecosystem.

It’s a brilliant ploy to increase the prominence of their store. Plus, the fact that they get 30% of the purchase price of apps on the MAS means that they’re only really “losing” $70 with the gift card, not $100.

Pretty brilliant all around.

Dilip Andrade

It’s brilliant…

many of the students who buy new macbooks already have either an iPod or an iPhone, so giving them another doesn’t really help. However, giving them applications better ties them into the ecosystem making it harder to leave down the road.

And we have to remember that $100 in the AppStore really only costs Apple $70. Depending on their margins on iPods, it may end up being an even bigger savings that it looks like at first glance.

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