“The iPad 2, unveiled on Wednesday, offers several sleek improvements over its predecessor,” Jenna Wortham reports for The New York Times. “But its most attractive feature is perhaps the same one its predecessor had: the price tag.”
“And what makes that feature even more compelling is that so far, Apple’s competitors in tablets cannot beat or even match it,” Wortham reports. “The iPad 2, like the original, starts at $499.”
Wortham reports, “Dozens of hardware manufacturers are scrambling to bring their own variations to market this year: Hewlett-Packard with the TouchPad, HTC with the Flyer, LG with the G-Slate and BlackBerry with the PlayBook. But prices, or even release dates, have not been announced, and industry experts say it is not yet clear whether the devices can be competitive with Apple on price… ‘The iPad may continue to own the market if competitors don’t get more realistic on their pricing,’ said Rhoda Alexander, an analyst at IHS iSuppli, a research firm. ‘Right now, it’s too high relative to what the iPad has for the product.'”
Read more in the full article here.
[Thanks to MacDailyNews Readers “JES42” and “Whit D.” for the heads up.]
I think the biggest issue is, they do not have a viable OS. 😉
Look it this way…
Imagine that BMW decides to lower thier prices to the equivalent of a Kia or Saturn or Geo….
How would it be for the rest of the car makers? they will only be able to seel cars to ignorant people that don’t know other choices.
That’s what is happening with the iPad.
Hilarious. For what seems like forever, the main argument Apple’s competitors had was “Well, sure Apple’s stuff is better, but it’s so expensive! Our product is almost as good, and a lot cheaper!”
Well, now the competitors’ products are “almost as good”, but more expensive. Why do they even bother? Who’s going to buy these things? Android nerds with more money than sense is all I can think of.
——RM
ALMOST as good?
You mean they barely work at all.
‘The iPad may continue to own the market if competitors don’t get more realistic on their pricing,’
Ha ha, the funny thing is their prices ARE realistic. They are prolly running a money losing margin as it is. My bet is that when the accounting is done, it’s be a redux of the netbook phenomena that got them where they are now!
How come they can’t match the iPad pricing, while they seemed to be able to offer netbooks at sometimes much lower prices (<$400) ?
Maybe the user experience didn't count then?
Or they hadn't realized that tablet computers address a different kind of market with higher expectations
The user experience counted, but, across the board, everyone was offering Windows, so you only had to work SO hard.
In the “slate” market, if EVERYONE was running Android or Windows or something else, then, given the same software, they’d put in the bare minimum hardware to make it work. BUT, with iOS out there, they have to bump up the hardware because the Android OS really doesn’t shine.
@vanfruniken,
Touch screen vs just display. Plus UI needs to be much better to work with out mouse.
Just a thought,
en
Easy to do when you own the flash and display supply and provide your own processor. This is a serious issue for the other hardware manufacturers. Nevermind the ecosystem/OS/etc. The competition cannot buy the hardware anywhere near the price Apple is getting based on volume. The bloodbath will continue.
I say we wait and see what zune tang has to say, his view should be the one and only view we should consider..
Hey ZT, how much do these fans cost you? I want a few!!!
Your cute baby, I don’t think you would have any trouble getting a fan club of your own 😉
I’ll be first! lol
Hahaha Super Funny!
The LG G-Spot? That ranks right down there at the bottom with the Dull Brown Streak for names.
I just love this quote from Motorola:
“The Xoom is priced exactly where it has to be,” he said.
Mr. Mutricy said he did not think the company would do anything differently to trim costs.
“It’s not that we are trying to lower the price and cannot,” he said. “We are pricing the Xoom based on what we are offering consumers.”
What they are offering to consumers:
No Flash
No LTE
No working Micro SD Slot
Everything the EXhume was supposed to have that the iPad didn’t have.
“Coming RSN”. 😉
Why do those damn Android fanbois keep talking about these $300 10″ display high-quality Honeycomb Tegra2 tablets that are going to be available soon and will undercut Apple and put them out of business?
How would smaller companies manage to compete against a cash-rich company like Apple when most of those small companies can’t even get a decent supply of components. It’s like Android fanbois don’t have any sense at all about manufacturing costs. The fanbois somehow think that tablets are as simple and as cheap to build as a netbook. I’m sure some companies can build junk tablets for cheap, but I doubt that the average consumer would want to be using them. I just get some darn sick of listening to those Android fanbois and their delusions of consumers buying up Android tablets by the millions.
Apple could probably sell iPad priced between $699 and $999, and Apple would still sell them as fast as they care to make them, and make even more overall profit on iPad.
Instead, Apple is using the ridiculously high profit per iPhone sale to compensate for lower profit on iPad, and selling iPad starting at $499. Still, it is remarkable that Apple can make any profit at that retail price; the profit margin is probably still at least 20%, considering the remaining first gen iPads are being sold for $399. If the competition tried to sell their tablet at $499, they would lose money on every unit sold.
And THAT is Apple goal. To make iPad 2 unmatchable at $499, even with a far inferior competing product. If they try, they lose money on every unit sold. The only tech company capable of trying that strategy is Microsoft, but after the Zune experience, I don’t think even Microsoft has the stomach to try their own self-branded “Zune Tab.”
“The competitors need to get more realistic with there prices”
More like get more realistic with there products
After years of listening to people bash the Mac on price, I actually saw some Android fanboy on Gizmodo last week complaining that pro-Apple people should not be allowed to use price as an argument as to why the iPad is better because price doesn’t matter.
Now THAT is awesome. how the world has changed!
lol yeah ikr? Fantardroids are really scraping their poop shoots to continue this “debate”. Game over! Apple’s iPad 2 is the smart consumer’s choice currently and in the foreseeable future. Seems like Google and Motorola are paying people to support their causes in these blogs around the net. I honestly don’t see any other reasoning for these idiot’s desperate and empty justifications.
If these fantardroids are true fans, not financially tied to Motorola or Google, their vacuous statements should be marked against them in future employment opportunities.
We can only hope innocent consumers aren’t hurt by such propaganda and lose a precious $800 Xoom that could more appropriately be used elsewhere.
make that:
lose a precious $800 on a Xoom
With these post-PC devices driving the bulk of Apple’s revenue, an exciting opportunity presents itself:
Offset the cost of their Mac business a touch with the increased revenue from iPad/iPhone/iPod. Imagine Mac Minis starting at $299-399, iMacs at $699, and MacBooks starting at $799
They could afford to do that and still make piles of cash due to the halo effect of their ecosystem. Their Mac market share would grow a huge amount in a short time. It’s definitely a possibility. Maybe not that drastic, but even $200-300 off each Mac they sell would be huge.
For the Mac business, I think Apple is happy with steadily increasing Mac market share every year, while keeping high profit margin. Customers get better value and quality for the higher price points. It gives Apple’s Mac product line the “aura” equivalent to a luxury car line. By trading lower profit per unit for higher volume, Apple would NOT end up with any more overall profit from the Mac business. It may even be less overall profit, just to play the numbers game like everyone else.
With more and more computer “applications” being web-based, the benefit of higher user share is not as important as it used to be. For the Mac business, the downside of pushing for higher volume with lower profit per unit is gaining share TOO FAST. The Mac business has been so successful (while the overall PC industry is stagnant) because it has that 90% (or whatever it is now) Windows segment to grow into. The rest of the industry (Windows) is collectively selling mostly to existing customers; Apple is selling to the existing Mac user base, but also to even MORE “switchers.”
So is it really beneficial to suddenly attain 25% market share (selling more Macs at a lower price) when Apple could have made the same overall profit to attain 15% market share (selling fewer Macs at a higher price)? Each percent of market share NOT YET ATTAINED is precious; don’t waste them.
The iPad business is different. Apple is the one with the huge current market share. Apple wants to stomp on the competition and keep them in the dirt, so that they don’t even have a chance to gain a foothold.
I agree. Also, shipping more products adds a lot of additional cost. It takes a lot more manpower to ship additional products. So to add cost in shipping and to lower the cost of the product would kill their profits. Not that they couldn’t reduce the price at all, but if you get $300 from the sale of an iPhone and then you reduce the price of the Mac $300 but ship millions more Mac the costs won’t add up.
Another large factor is that Apple is sexy right now because of their high profit margins. Investors are amazed that they can ship out so much and earn so much money. Investors wouldn’t be talking about Apple every day if they had Dell margins. And all the talk produces a lot of publicity which turns into a lot of sales for Apple.
I think Apple is playing this one right.
Hey, I got it… bundle a MacBookPro, an iPad and an iPhone for a special package deal… crush the competition with an unbeatable combo. Pick your model, pick your carrier and nobody could even come close for the money… Man would they howl. Throw in some cloud service and Apple would own the whole game…
Not sure about that package. Too much overlap for a new Apple convert. Now, a MacBook Pro, a iPhone 4 and a free Apple TV, now you’re talking.
Ooops ! I forgot about the Apple TV.. how about pick any three and get some free Mobile Me. The choices are outrageous and the halo effect would be a three-ring affair.
I doubt there are enough customers in the market for a MacBook, iPad, and iPhone at the same time. For customers who really want all three at once, they would just buy them anyways (a special deal is not going to help make that sale), so why would Apple want to make less profit with a special deal when it is not necessary?
I think it’s an interesting position for Apple’s competition to be in at the moment. If it’s true that they can’t make money on selling their tablets (should be taking them) at a similar price point to Apple, they can’t stop selling them or they’ll leave the sector open to Apple.
If they don’t maintain (or try to get a foothold) a position in the tablet story, it will be a lot harder to draw attention to themselves much later on
At this stage in promulgating a new platform the name of the game is market penetration. Apple is applying lessons learned from their experience with the Mac.
With a FERVOR! (lol)
It’s simple…
Why buy a fake iPad when you can get a real one for a better price?
When I was a kid I wanted Transformers, not GoBots, the K-Mart Transformers… I haven’t changed.