updated 10:40 am EST, Wed November 26, 2008
'Aggressive' Black Friday
Apple is likely to cut its prices more heavily than usual during this year's Black Friday event, says Kaufman Bros. analyst Shaw Wu. Wu observes that while Apple typically puts goods on sale at a 5 to 10 percent discount on Black Friday, this year may see cuts as high as 15 percent on everything, including Macs, iPods and miscellaneous accessories. The information is said to be based on checks with both suppliers and distributors.
Sales are already said to have taken effect at third-party vendors such as Amazon and Best Buy, which are believed to be taking the hit themselves, on the assumption that Apple buyers typically pick up a host of accessories such as cases and cables. Wu agrees, however, with reports indicating that some Apple Stores are choosing to price-match.
The analyst also argues that investors should not worry too much about the effect of Black Friday, since it is not only likely to be a response to a poor economy, but already factored into margin predictions for the December quarter of 30 to 31 percent. Wu in fact says that Kaufman is sticking with a forecast of 31.5 percent in gross margins, on the basis that pricing for components -- including key items such as panels and memory -- has continued to slide.
Revenue for the quarter is expected to be $10 billion, producing $1.47 in EPS. The consensus view is said to be $10.1 billion with a $1.43 EPS rating.