Apple Dips Into Discounting

NEW YORK (TheStreet) -- Apple (AAPL) stores as a discount house? Let's slow down already. Apple stores are hardly festooned with sale signs, and a New Age Crazy Eddie isn't shouting about "insane" prices.

That said, discussion over the weekend revolved around this: Apple has quietly told its store workers to match discounts on the iPhone 4 and iPhone 4S from approved major retailers and carriers like Sprint (S), which is currently offering a $50 break. Apple won't offer the discounts automatically; customers have to ask.

In reporting on this turn of events, Investor's Business Daily, The Examiner, PC Magazine and pretty much everyone else told the same simple tale. Apple is doing it to clear inventory in preparation for the expected release of the iPhone 5 in September.

Fair enough, to a point.

But it's hard to discount selectively. Granted, if anyone can do it, Apple probably can. But discounting, even for a great high-end retailer -- or consumer electronic maker -- tends to be a slippery slope. Once customers see a sale, their perceptions and preconceived notions begin to change. They start to expect a sale.

Consumer electronics have always been all about sales -- think everyone from Dell (DELL) to Best Buy (BBY) to Research in Motion (RIMM) -- so it's not too far out to think that Apple might beat the discount drum one day.

One day. This is nothing that will impact Apple earnings in the next few quarters, so don't condemn or even judge Apple. But -- and the media is not telling you this -- keep an eye out for this.

Apple is not going to leave the high-end fold anytime soon. But the snazzy gadget maker's first foray into discounting is something to watch long term.

Apple is not a discount house, but don't discount the eventual impact that discounting might have.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

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