Dramatic Price Cuts Announced By Apple

Monday, 8 Jun 2009 | 6:03 PM ET

At the company’s developer’s conference in California, Apple stunned their audience with some spectacular announcements – including a decision to slash prices, dramatically.

For example, Apple cut the entry price for an iPhone in half. The 8-gigabyte iPhone 3G, which came out last year, will be reduced to $99 from $199.

But that’s not to say the iPhone is becoming pedestrian. They also introduced two higher priced models -- the 3G S -- that will sport a faster processor and sought-after features like an internal compass, a video camera and an improved photo camera. A 16-gigabyte version of the 3G S will cost $199 and a 32-gigabyte model will be $299.

Mike Abramsky of RBC Capital Markets greeted the news enthusiastically. “I think we’re seeing that innovation is alive and well at Apple”, he says on Fast Money. “And Apple is taking their production efficiencies and passing them along to consumers. (But despite the price cuts) their margins should remain sustained and possibly even boosted by the move in the short-term.”

The newest iPhones go on sale June 19, just as two-year contracts for the buyers of the original models are expiring.

But that’s not the only major price cut. Apple also said new laptops will be about $300 cheaper. Specifically, the new MacBook Pro laptop with a 13-inch screen will now start at $1,200 while a 15-inch model will sell for $1,700 and up – again both are $300 less than existing similar models.

What's the trade now?

I think Apple is a little over-extended here, muses Guy Adami. I think you see it at $130 before you see it higher.

Apple Lower Despite New Phone
Insight on Apple's new iPhone and what it means for the stock, with Mike Abramsky, RBC Capital Markets analyst and the Fast Money traders.

Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send your e-mail to fastmoney@cnbc.com.

Trader disclosure: On June 8th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (BX) Call Spread; Najarian Owns (DELL) Call Spread; Najarian Owns (FCX) Calls & Put Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MCD) Call Spread; Najarian Owns (MOS) Put Spread; Najarian Owns (PALM) Call Spread; Najarian Owns (WNR); Najarian Owns (ISIS); Terranova Owns (TER), (XBI), (ABT), (RIMM), (BTU), (BRCM), (GENZ); Terranova Owns (MS) & (MS) Calls; Terranova Is Short (FCX) & (FCX) Puts; Terranova Owns (HES) & (HES) Calls; Terranova Owns (XOM) Call Spread ; Terranova Owns (DIS) Call Spread; Terranova Owns (X) & (X) Calls; Terranova Owns (JPM) & (JPM) Calls; Terranova Owns (POT) & (POT) Calls ; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Finerman Owns (BAC) Preferred; Finerman's Firm Own (NOK), (PBR), (RIG), (TBT), (WRC), (KFT); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (WFC) Preferred; Finerman Owns (WFC) Preferred; Finerman's Firm Is Short (BAC)

Crowell, Weedon & Co. Owns (CSCO)

  Price   Change %Change


Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report