Apple Inc. Hits an Aggressive New Low

Apple (NASDAQ: AAPL) brought out an incremental update to its MacBook Air today, with a few minor upgrades. The new Intel Haswell processors in this version are faster than in the previous version, and some upgrades to battery life were also made. However, the bigger story here was the pricing change. Apple brought the price down of its entry-level 11-inch MacBook Air from $1,000 to $900. That represents a new low price point for a new MacBook, as Apple has historically kept its lowest price point at $1,000.

In this segment from Tuesday's Tech Teardown, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu discuss why Evan sees the pricing shift as significant. He sees the $1,000 mark as a psychological threshold that the company has never felt comfortable crossing before with its MacBooks, and says this could be a shift toward more aggressive pricing for Apple. Evan also discusses how important this product segment still is for Apple in a world where smartphones and tablets grab all of the media attention, and why this is one of the few product categories where the company can still outpace the market and gain market share.

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  • Report this Comment On April 29, 2014, at 9:15 PM, Chiam wrote:

    You kids have to realize that if the i 6 line is huge in sales as Brian Marshal predicts, the added cash will pay for all these loans.

    However, they are buying back shares but issue 7 times more shares with the split. So liquidity will increase as far as share count is concerned. There will be 6 billion shares soon. That may cause the price to drop with so much excessive share.

  • Report this Comment On April 29, 2014, at 9:24 PM, SimchaStein wrote:

    The lower price for MBA increases its addressable market by 10% to 20%. The net impact of earnings will be less than 1%.

    But it's the attitude that matters - increasing share of mind, wallet, market. Nice.

  • Report this Comment On April 30, 2014, at 9:09 AM, yragsapo wrote:

    "Apple brought the price down of its entry-level 11-inch MacBook Air from $1,000 to $900. That represents a new low price point for a new Mac, as Apple has historically kept its lowest price point at $1,000."

    You might want to consider that the Mac Mini starts at $599 and chance the article to reflect that.

  • Report this Comment On April 30, 2014, at 2:35 PM, mikeyseattle wrote:

    Articles like these frustrate me. Really misleading title. It's almost as if he knows more people will read the actual title than the article. I guess that would only make sense if he shorted Apple. Oh wait, he did.

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Evan Niu

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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