“When Apple launched the iPad last year many were surprised at the aggressive pricing,” James Kendrick reports for ZDNet.
“This pricing strategy has proven to be brilliant, and forced competitors to look to carrier subsidies to get pricing low enough to generate sales,” Kendrick reports. “This is why we don’t see too many Wi-Fi only tablets hitting store shelves even though most companies announce them at launch.”
Kendrick reports, “The reality is they cannot sell them cheaply enough to both compete with the iPad and make a profit.”
Read more in the full article here.
If Apple can somehow make a $399 price point (using current tech when the iPad 2 comes out) imagine the damage they could do to the competition. It would be the iPod all over again.
Just how do you expect Apple to drop its price at least a $100 for the iPad 2 if all the competition haven’t been able to create a WiFi tablet for anything near the $499 iPad?
md8mac… read again.
“using current tech” when the iPad 2 comes out. I’m saying keep the CURRENT low end iPad that is currently $499, drop the price by $100 and keep it in the pipeline when the iPad 2 comes out. Hearing from reports, Apple has been able to lower costs unlike competitors by buying it’s internals in a mass quantity it’s competitors can’t achieve. This allows them to possibly get to this price point.
From an economic standpoint it wouldn’t even be unimaginable that they could sell the iPad 2 at slightly less than the $499 level. Somewhere between $450 and 500 should be doable. The manufacturing costs per unit, even with the new tech, should still work out to be less for the iPad 2 vs. the iPad 1 when it first came out. But I don’t think they should continue to sell the iPad 1. If the rumors of an autumn release for an iPad 3 (or 2.5) are to be believed then I think it will be more likely that they will sell the iPad 2 and 3(2.5) simultaneously. (like a 3G and 3GS).
I’d say hit them with that price point now (via iPad 1) while competitors are struggling. It would truly keep Android at bay near term (which should be paramount to Apple given Honeycombs new entrants coming and HP’s tablet). Alot of people look at price only and think “good enough”.
Agreed. Also consider many corporate environments ban cameras. iPad 1 (or better yet a beefed up one sans camera) has much market still to conquer.
Reactions such as yours shows how disruptive it could be.
Apple is already putting major hurt on the competition with the current iPad priced at $499. It would do more harm TO APPLE (than the competition) if Apple sold the current iPad at $399 while introducing the new ones starting at $499; that $399 model would take sales away from the $499 and higher models, while earning less revenue and profit per unit.
Apple did price the iPad very aggressively at $499. I think it has a lower profit margin than most Apple products, especially when compared to iPhone with its subsidy. A more typical pricing would have been $799 (and $999 at the high end). Even after the first year and production ramp, Apple would not be able to “afford” selling the current iPad for $399.
$499 is also a good price point for the low-end iPad because it fits nicely with the iPod touch choices, which maxes out at $399 for the 64GB version.
That may be true, Ken. It would require a reorg in pricing of the Touch (which I think is due). Still, it would make competitors crap which might be worth it alone. (hehe)
Given that the iPad 2 will undoubtedly give us more functionality than the current iPad 1 (I’d be getting an iPad 2 given the rumors of Facetime capability), I doubt it would cannibalize sales; It would more likely attract people who would have otherwise not have given an iPad a single thought. People who choose the original iPad in this case wouldn’t have been game to the iPad iteration anyways. It would tend to be a Dell move, where consumers would see the entry price, then see the upgrades possible (iPad 2) and pick the one they can afford. You must admit it would simply crush the competitors in their steps very early on in the numbers game if Apple could pull it off. Given it’s last years tech, it could be possible.
Would like to see $399 WiFi iPad2, $439 3G+WiFi iPad2. Knock off all of RIP, MOT, SAM, etc off market at once. Those shameless copy-cat.
I see that price for the 16gb iPad 1.
$499 for 32gb iPad 2.
iPad 2. 32, 64, and maybe 128gb… Versions.
And of course wifi/3G versions like now.
Or apple could just do away with all wifi versions.. Make them all 3G.
Why would they kill of wifi? Wifi is a much better option, what with all phones now being hot spots.. My iPhone gives wifi to my iPad.. Saved me $100!!
Cause all 3G have wifi also…
And there is NO requirement for you to activate the 3G plan…
Same as if you take a iPhone 3GS and take the sim out and use it as an iPod touch.
and therein lies the timing of the iPad – apple was not going to release a netbook competitor to kill off the netbooks until they could achieve good profit margins. no one can compete with them now, not even with a free operating system.
Another reason to sing the praises of Tim Cook… His aggressive purchasing of flash memory and displays has a strangle hold on the market that other companies can’t compete with.
Apple’s strategy team is beating up on everyone… they no doubt had some of these plans in place a while back.
In any case. 3G(or future LTE) iPads are too versatile to pass up. I dont have one myself… but we will see when the iPad 2 ships…
Kendrick is selling his iPad because he doesn’t like Apple’s subscription policy that they just announced. These so-called frigtards shouldn’t get your hits.
Instead of clicking on Kendrick, try this:
http://www.macworld.com/article/157970/2011/02/subscriptions.html?lsrc=rss_main
Kendrick should read it, too.
Most likely Apple will keep the same price structure for the iPad 2. It will not hurt sales doing that. Just look at the history of iPad. And keep the same 6 models.