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Report: Apple eyes Mac pricing cuts

Faced with a poor economy and demand for cheap Netbooks, Apple could be considering changes to the price of its most popular Macs, according to a report.

Apple could be getting ready to cut prices on iMacs and MacBooks, according to a report.

Does Apple really have MacBook pricing cuts in mind? CNET

AppleInsider is reporting that Apple plans to introduce less-expensive versions of its two most popular Macs at some point over the next several months. It's not clear how much of a cut Apple has in mind, or whether it plans to offer more value at current prices, but Apple has apparently decided that it wants to hedge its bets against a proliferation of cheap Netbooks over the last year or so, according to the report.

Mac pricing has certainly been a big topic over the last several months, as Microsoft has aggressively pushed the notion of the Mac as an expensive bauble unfit for recessionary spending. Apple responded to those ads with its standard message that Macs are more capable than PCs, therefore PCs aren't quite the bargain they appear to be.

This move, if it comes to pass, would therefore represent a change in Apple's strategy of positioning the Mac as a premium experience. Apple did cut the price of the MacBook last year, keeping an older system around for $999 while introducing the new unibody MacBooks in October. The company also lowered the cost of acquiring certain features previously reserved for the high end of its notebook line, which to some extent has a similar effect to a price cut.

Times have changed since then. Apple's Mac shipments declined year-over-year for the first time in several years during its second fiscal quarter as certain PC vendors--such as Asus and Acer--improved their shipment totals on the back of cheap Netbooks.

If this move is really a response to the Netbook phenomenon, then I think it's a mistake. Netbooks provide a cheap basic computing experience, but whether they will turn into a long-term alternative to full-sized notebooks is far from certain.

IDC estimated that 11 million Netbooks were sold in 2008, and is predicting that 21 million will be sold in 2009, out of an overall worldwide PC market of around 300 million units. If those people are deciding to buy Netbooks simply because they are cheaper, then they probably weren't going to buy a Mac anyway. If they are buying them because they want that compact computing experience, they weren't going to buy a Mac either.

AppleInsider was careful to emphasize that Apple may not have bargain-basement pricing moves in store; the changes could be more subtle. That's a good thing, because once prices go down in this industry, it's almost impossible to get them back up, and Apple's profit margins are the envy of the computer industry.

It's possible that Apple may just have promotional pricing in mind as it enters the educational buying season this quarter and the back-to-school buying season next quarter, two of the most important Mac sales periods of the year. Limited promotions could buy Apple some time to get its response to demand for a cheaper, more compact computer--the Mac minitablet--out the door while still preserving its Mac product line margins for a time when consumers are more confident.