Apple Inc. (NASDAQ:AAPL) recently announced that it will offer a $50 discount to Apple Watch buyers if they buy the watch bundled with the new iPhone 6S or 6S plus.
The discount will only be available in select stores in San Francisco and Boston. Unfortunately, the offer will not be extended to online shoppers. It also happens to be a limited time offer because it will only be available from October 31 to November 15 according to MacRumors. A $50 discount sounds like an interesting and appealing offer from the company, but there might be an underlying issue.
Apple has not been known to offer discounts on its products, thus leaving the question whether Apple Watch sales have been tanking. If so, then the company might be trying out ways of boosting sales for the smartwatch. Apple had previously stated that Apple Watch sales were above expectations but did not reveal details about unit sales perhaps as part of not disclosing insider information to competitors. Analyst Andy Hargreaves suggests that Apple Watch sales have been rapidly slowing.
Slow sales would explain why the company is deviating from its conventional way of operating. If that is the case, then offering discounts in select areas might just be a test run, and if successful, discounts might be extended to other shops in other areas including online sales. Alternatively, the discount might just be a stunt to show customers that it can also be considerate and kind.
As for the company’s customers, Apple’s products are usually extremely priced especially considering the production costs that go into the production of a single unit. A $50 discount might be appealing to customers, but it is a very small fraction compared to the actual price that one will pay to acquire the bundled items.
A discount of $50 is a relatively small compromise for the company though large one where high sales volumes are involved. A market survey indicates that Apple watch sales reached 4.5 million in the third quarter. The numbers might seem satisfactory but Apple is convinced that sales are not quite there yet. Discounting the product ahead of the festive season might just be the push needed to boost sales.
Sources: Forbes, TheVerge, DigitalTrends