Consumer Electronics

Best Buy Drops Apple Watch by $100

Douglas A. McIntyre

Published: February 15, 2016 6:20 am

Last Updated: January 13, 2020 1:11 pm

Best Buy Co. Inc. (NYSE: BBY) has dropped the price of Apple Watch. Either demand for the wearable has hit a wall, or the consumer electronic retailer believes it is a way to bring customers through its doors (or to its website).

The Apple Watch discount applies across the entire family of the product, from the 42mm stainless steel case with Milanese loop, which retails for $699 but has been cut to $599, to the Sport 38mm silver aluminum case with orange sport band, which retails for $349 but has been dropped to $249. Best Buy also is selling refurbished models, even though it is a new product, first shipped last April 24.

Based on a look at the Apple Inc. (NASDAQ: AAPL) website, the company has not dropped the price of versions of its smartwatch sold online and available for delivery at Apple Stores.

While it is not unusual to drop prices on relatively new consumer electronic prices, Apple may have more than its share of trouble creating demand. When it reported its last quarter, Apple Watch sales were not revealed on their own but were lumped into a category labeled “other products,” which included Watch, Apple TV, Beats products and iPod sales. Revenue for this segment was $4.4 billion of Apple’s total of $75.9 billion. The figure was even below Mac sales, which reached $6.7 billion.

The market for smart wearables is still small. IDC posted total sales at 21.3 million last year, with iOS (Apple’s operating system) at 61% market share. The market is expected to expand to 88.3 million by 2019, and the iOS share is expected to be 51.1%. For now, it is a very modest market, which may be why the Apple Watch is on sale.