Apple is Unlocking These New Buyers
Apple (NASDAQ:AAPL) believes there is a new wave of domestic consumers that the company is only now starting to make inroads into. Details from the company’s post-earnings call suggest that the very healthy sales of the discounted second-generation iPad have been sparked by a new audience in the area of education.
Apple chief executive Tim Cook said the absolute sales of iPad 2 in the last quarter had been “exciting.”
Cook added that the lower price of the iPad 2, starting at $399, was resulting in creating new demand that had previously been untapped. “… from what we are seeing, this unlocks some education demand that is probably a more price-sensitive customer,” Cook said. “Also, in several other countries, there was a marked change in demand at that price point.”
Domestically, Apple’s chief financial officer Peter Oppenheimer said, K-12 schools were now buying twice as many iPads as Mac computers. “iPad continues to open doors for new customers with whom Apple previously had no relationship,” he said. “As we enter the K-12 institution buying season, we’re hopeful that iPad will be a popular choice.”
The prices of iPad 2 were lowered at the same time as the launch of the device’s third-generation version on March 16, and Oppenheimer said it was still too early to perfectly measure the change in demand since “we’re just learning about the elasticity of demand and the $399 price point.”
Oppenheimer added that while the company was selling third-generation iPad devices “as fast as we can make them,” a truer comparison with how the lower-priced version had done versus the new one would probably be made a few months down the line. “We’ll learn more over this quarter especially as we get through the education buying season, which looks terrific for us especially on the iPad,” he said.
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