Apple already considering iPad price reductions? | iLounge News

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Apple already considering iPad price reductions?

Apple executives, speaking in a meeting with Credit Suisse analysts, have suggested that the company is already considering price reductions for its yet-to-be-released iPad tablet should early sales of the device fail to live up to internal expectations. Citing Credit Suisse analyst Bill Shope, the Wall Street Journal reports that Apple wants the iPad to be the best device in several usage cases, including consuming media and browsing the Internet. Since other devices, including laptops and the iPhone or iPod touch, may be more appropriate to use under certain conditions, Shope indicates that cannibalization may be less of a concern than some believe. In addition, Shope said that Apple management indicated that it will remain nimble in terms of pricing, suggesting that the company could lower prices on the iPad if consumer response is lower than projected. Apple is expected to begin shipping Wi-Fi-only models of the iPad late next month.

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Comments

1

Which only goes to show just how much padding is inherent to its introductory price point.

Posted by Code Monkey in Midstate New York on February 8, 2010 at 3:16 PM (CST)

2

I find this recounting highly suspect. I doubt very much that Apple would discuss pricing with anyone let alone sow doubt in the public’s mind as to potential price cuts on a product that hasn’t even been released yet. They would just be shooting themselves in the foot while we all hold back to await a price cut instead of lining up to buy them on day one.

Posted by JS on February 8, 2010 at 3:26 PM (CST)

3

I expect Apple to stick it to me after I buy the first iPad. I understand that. It’s what they do. It won’t be any different than the iMac/iPod/Newton/iPhone that I have owned.

Posted by glen e on February 8, 2010 at 8:54 PM (CST)

4

And yet you keep going back? The instant there were Mac clones available in the early 90s, I jumped to get away from Apple’s “just because we can” pricing. After Jobs returned and killed the Mac clone licensing program, my next computer ran Windows. The iPod got me back using Apple products, but I guess even that’s going to come to an end if trends continue.

It’s obviously your money, but you’re part of the problem. It wouldn’t be “what they do” if people didn’t keep financially rewarding them for this business model. If Acer or Dell or HP or eMachines or Sony or Toshiba (you get the idea) tried to do this sort of “ain’t it cool” pricing, the product would sit on the shelves because consumers would simply go elsewhere.

Posted by Code Monkey in Midstate New York on February 8, 2010 at 9:16 PM (CST)

5

I like apple stuff…so sue me..made tons of money from Jobs return thru stock so I love to get the latest. It’‘s not real estate or major purchases in my life, they’re toys. I don’t take it seriously and frankly don’t mind beimg ‘part of the problem”.

Posted by glen e on February 8, 2010 at 9:33 PM (CST)

6

It may be a simple change of strategy.  Get the device out in the market as quickly as possible in numbers that can set/change trends.  Once they have you committed to the product/format, make the better margins on future upgrades of the product since you now have a switching cost.

Posted by Charles Farley on February 9, 2010 at 5:26 AM (CST)

7

I wouldn’t see it as a change in strategy so much as noticing the grumblings out there indicate the larger consumer base may not see $830 for the same basic functionality as a $300 notebook with ~150GB LESS storage as working out as well as they thought.

Because here’s the blunt truth: there’s nothing special about the technological parts in the iPad, they’re all either off the shelf components or extensions of things Apple has already been doing for years. How they’re put together and interact with the OS, peripherals, and the home computer is what’s going to give the iPad a long term success in the larger market, or not as the case may be. The tech is stuff we’ve had for years.

I strongly suspect based on comparable components out there and Apple’s volume discounts that Apple is probably only spending around $200 for the 16GB model (including both wi-fi & 3G variants), and around $300 for the “top of the line” 64GB variants.

Like much of Apple’s pricing, particularly in early generations, they add monstrous premiums to the price point to increase profits, but also to reduce what they see as competition with existing products. For example, priced competitively, there’s no reason you shouldn’t be able to buy an iPad for only $100-$200 more than the corresponding capacity touch. Nor is there any reason except some undisclosed pay out to AT&T for the $130 premium for the 3G enabled models. The receiver chipsets are probably identical between the two with the only difference being the addition of cell antenna and sim card holder, and that’s nowhere close to any cost that would justify a $130 price differential.

I get it, the iPad is cool, it does something newish, it isn’t just a notebook, blah, blah, blah, but no matter how you slice it, if you aren’t just planning on the same niche market that keeps the Macintosh division rolling in money by being willing to spend $4000 for the same function others get for half that cost, the price is going to need to be rapidly scaled down like they did with the iPhone.

Posted by Code Monkey in Midstate New York on February 9, 2010 at 11:25 AM (CST)

8

Remember the 1st Gen iPhone price, I rememebr paying $600 for the high end model, then they cut the price in half for a new model . . . Apple needs to get their pricing in order. I WILL NOT, I repeat, WILL NOT be purchasing an iPad until I see a camera, iPhone tethering amd more app development. Sorry Apple, not this time.

Posted by Daniel Maldonado on February 12, 2010 at 12:58 AM (CST)

9

Browse web without flash:))

Posted by fifi on February 17, 2010 at 6:51 PM (CST)

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