Linked List: December 18, 2012

Tuesday, 18 December 2012

As Usual, Apple Is in Trouble 

Here’s a guy, “Tyler Durden” at ZeroHedge, who sees these discounted iPhones at Wal-Mart as a sign that Apple’s margins are going down the tubes:

And, as Reuters reports with its Friday night bombshell report, Apple has finally thrown in the towel on pretending there is a supply shortage and admitted there is simply not enough demand at the given price point, by proceeding to sell the margin flagship iPhone 5 at a third off the original price, at the bargain basement commodity expert Wal-Mart of all places.

People believe what they want to believe. The rest of the post suggests pretty strongly that this guy thinks the iPhone’s popularity is a fad, and a waning one at that. But he’s either confused or willfully ignorant if he thinks a subsidized price drop from $190 to $127 is “a third off” the iPhone’s actual price. Unsubsidized 16 GB iPhone 5 cost $650, retail. That’s certainly not what Wal-Mart pays wholesale, but I feel pretty confident Apple’s margins are going to be just fine this quarter.

Reuters: ‘Wal-Mart Selling iPhone 5 at Big Discount’ 

Alistair Barr, reporting for Reuters:

Wal-Mart said it is selling the 16 GB Apple iPhone 5 for $127, versus an original price of $189.97. The price is valid with a two-year contract from wireless carriers Verizon, Sprint and AT&T, the retailer added.

Wal-Mart said it is also selling the 16 GB iPhone 4S and the 16 GB iPad with Retina display and WiFi at discounts.

The offers will be available for 30 days in about 3,000 of Wal-Mart’s stores, which were not identified. They are not available online, according to the retailer.

Interesting, but I don’t think it’s a big deal. For one thing, they’re apparently only offering 16 GB models. But the bigger reason is that their iPhone discount is largely symbolic because of the subsidized pricing. It’s a discount, but I think “big discount” is misleading.

Update: And the discount retina display iPads are remaindered iPad 3 units, not the iPad 4. (Still, a great deal. I bet those iPads sell fast.)