No Free Apple iPods in 'Back to School' Promotion

Apple Inc. (NASDAQ: AAPL) will not offer free iPods as part of its annual Back to School promotion, instead it will offer a $100 gift card.

California-based Apple's latest Back to School promotion, which runs from June 16 through September 20, clearly entails Apple's strategy for students by making them download books for classes, and helps focusing more on iOS ecosystem.

Apple offers a $100 gift card to be used on the Mac App Store, the App Store, the iTunes Store and the iBookstore in the U.S. with a qualifying Mac purchase (MacBook, MacBook Pro, MacBook Air, iMac or Mac Pro).

The promotion marks an interesting change of strategy for Apple who has traditionally offered a free iPod with purchase of Mac computer. However, iPads and iPhones are still not a part of the promotion.

We believe the strategy entails focusing students on using the Apple ecosystem for downloads -- including the download of books for classes. The change also underscores how the iPod has clearly moved away from Apple’s focus -- and now fostering an iOS ecosystem with other devices is far more important, said Ben Reitzes, an analyst at Barclays Capital.

Meanwhile, Reitzes still expects an iPod refresh in the September timeframe, which could happen alongside the launch of a new iPhone and the availability of iOS 5 and iCloud.

The usually iPod-centric special event took place on September 1, 2010 and on September 9, 2009. iPod monthly unit sales in the U.S. had been trending above Reitzes' quarterly estimate of down 18 percent year-over-year for calendar second quarter -- but the lack of back to school “free” sales should cap upside.

Reitzes said this year’s back to school promotion is running about two weeks later than usual through September 20, 2011, while last year’s deal ran from May 25, 2010 through September 1, 2010 and the 2009 version ran from May 25, 2009 through September 8, 2009.

Reitzes believes the updated timing of the promotion could indicate a substantial Mac upgrade cycle starting in the September quarter, including new MacBook Airs.

We note that alongside Apple’s promotion, Best Buy appears to be matching the offer with a $100 Best Buy store gift card with the purchase of the same qualifying Macs, said Reitzes.

Apple stock rose 2.66 percent to $323.70 on the NASDAQ Stock Market at 11:32 am EDT.