Analysts react to Apple laptop pricing

October 14, 2008 7:15:34 PM PDT
In Cupertino on Tuesday, Apple Computers put an end to the industry guessing game and announced upgrades to its laptop line. There had been talk of the company lowering prices for these tough economic times, and it did so at entry levels, but not as much as some people expected.

When Apple CEO Steve Jobs speaks, bloggers and industry insiders do not just hang on every word. They also write them. He had a message for them Tuesday: "110 over 70. This is Steve's blood pressure."

So much for rumors of Jobs' weight loss and ill health. As for the company's future, he made a case for a new line of laptops, to this, the most critical of audiences.

"He took a manufacturing process message and turned it into excitement about new products," said computer industry analyst Van Baker.

Apple now builds all but one version of the new Macbooks and Macbook Pros from a solid piece of milled aluminum. They are calling it unibody construction with LED glass backlit screens, one-button multi-touch mouse pads and improved graphics.

"This is a tour de force of engineering," said Jobs.

Apple said that the new computers will appear in its stores Wednesday. This move had been long expected and anticipated, but did Apple make the right move at the right time?

"Apple? I never see much of a risk there. When they put out their products, there's an instant demand for them," said Best Buy salesman Jack Dougherty.

However, Apple did not lower prices nearly as much as people expected, despite what it describes as a growing market share -- 18 percent of all computer sales.

"I think the world was really looking for was dramatically lower prices and we did not see that," said computer industry analyst Larry Magid.

The least expensive laptop, in plastic, will sell at just less than $900, more than entry level machines from other companies. It almost seems as if Apple is relying on reverse psychology.

"If you're a competitive manufacturer, you have to worry about how am I going to get back into that high-end notebook space and steal some share back from Apple," said Baker.

Aside from his health, there were two other subjects Jobs did not talk about today -- the economy in general and Apple's stock price, which has been down recently.

The company releases third quarter earnings next week.