Apple's home page encourages you to buy Apple gear for gifts, but Apple's pricing strategy begs to differ. Image source: Apple.com.
Black Friday is one of the busiest shopping days of the year, but Apple (AAPL +0.11%) isn't really all that interested in joining the festivities. Well, at least not directly.
In prior years, Apple has offered some rare discounts on a wide range of products. These discounts were modest compared with what shoppers could find through third-party retailers, but at least the company made something of an effort to participate. This year, Apple offered no discounts of any kind.
Here's why Apple couldn't care less about Black Friday.
The best defense is rarely giving discounts
Apple has unrivaled pricing power in the realm of consumer electronics, thanks to its focus on quality and differentiation through vertical integration. Apple exercises this pricing power by charging premiums over competing devices, and its hesitance to offer discounts on its flagship products is a way to defend that power.
This strategy reinforces the consumer perception that Apple products truly are worth more, which in turn also helps products retain higher value in the secondary market (which is also a reason why the market for used Apple products is so active).
All of this being said, Apple does offer ongoing educational discounts and sells refurbished products at lower price points, but when it comes to new products, the company rarely gives discounts.
Authorized resellers are an important piece of the distribution puzzle
Another aspect of Apple's pricing strategy is price maintenance. This is a practice where a manufacturer sets a minimum price that third-party resellers are permitted to sell products. Make no mistake: Wireless carriers and big-box retail stores still generate a meaningful portion of sales volume for Apple.
You're much more likely to find a discounted deal on a new Apple product through a third-party authorized reseller than you are directly from Apple, but even then the discounts are usually within a fairly tight range. Apple's wholesale discounts for resellers are supposedly very minimal. For example, ZDNet reported way back in 2011 (shortly after the first iPad launched) that retailers only receive a 3% discount.
While many retailers offer various price matching policies, Apple's is somewhat limited. The company will price match up to 10% off the price offered by an authorized reseller. So if a reseller is offering $100 off a $400 item for Black Friday, you might as well go ahead and buy it through the reseller, since Apple will only give you $40 off. This allows Apple to save some face while not really needing to compete with its own resellers.
Besides, all Apple really cares about is that you buy an iDevice, get hooked into its ecosystem (which will likely result in you buying more iDevices), and board the recurring upgrade train.
Let's not and say we did
If Apple is going to run a promotion, it will often offer promotional prices to these resellers instead of through its own direct sales channels, and these resellers will then turn around and offer the promotion to consumers. In this way, it can still use promotional pricing to stimulate demand or indirectly participate in seasonal shopping events like Black Friday, but it still gets to stand by its stringent first-hand pricing for aforementioned defensive purposes.
While Apple's reseller pricing is not publicly available and it would likely punish any reseller violating confidentiality agreements with death, I strongly suspect that it offers meaningful Black Friday discounts to resellers to facilitate their promotions and participate in the shopping extravaganza.
