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Wednesday, November 26, 2008, 07:00 am PT (10:00 am ET)

Apple's Black Friday discounts may rise to 15%, says firm

Investment firm Kaufman Bros. said Wednesday it believes Apple is preparing to offer its deepest Black Friday discounts ever, but said the move has been accounted for in the company's guidance and will be largely offset by falling commodity costs.

Citing supply chain and distribution checks, analyst Shaw Wu, who recently joined Kaufman from American Technology Research, said this year's Black Friday sale is shaping up to be a bit more aggressive than usual.

"Historically over the last couple years, Apple has offered discounts between 5%-10%," he wrote in a research note to clients. "We think there may be discounts of up to 15% this year on Macs, iPods and accessories. It is not clear to us if iPhone will see a discount as well."

Giving the analyst higher conviction is a flurry of related sales from Apple authorized resellers such as Amazon.com (Black Friday Sale), Best Buy (4-Day Apple Sale), and Mac Mall (57 Hour sale). However, he notes that Apple has not made material pricing concessions to distributors or resellers, which means that those parties are taking a profit margin hit on their own.

"We believe the reason retailers are willing to take a hit is due to the ability of Apple products to draw people into stores and the high likelihood that these customers will purchase high-margin accessories including cables, cases and speakers," Wu wrote.

While Apple's move towards deeper discounts this holiday may draw some concern from investors, the analyst said his checks indicate favorable component pricing on memory, hard drives, LCD panels, and other commodities that should help mitigate or offset revenues lost as a result of the promotions.

In addition, he believes Apple intentionally guided its December quarter downwards in order to "leave room" for the Black Friday sale and other promotions.

Wu initiated coverage of Apple at Kaufman earlier this week with a Buy rating and $120 price target.

AppleInsider has recently compiled a list of Mac discounts being offered as part of early Black Friday sales. MacMall's discounts appear to be the strongest yet, with those from Best Buy a close second in most cases. Last year, MacMall's discounts beat Apple's hands down.