Solving the iPad pricing mystery.
16GB 32GB 64GB
Wi-Fi $499 $599 $699
Wi-Fi + 3G $629 $729 $829
$500!?
this is the reaction that most people have when they hear the price of the iPad.how, after all, is a $500 touch pad/eBook supposed to compete with $250 dedicated eBook readers like Amazon’s Kindle or Barnes&Noble’s Nook (both of which have better battery life and less eye strain for the user) or the iPhone, which delivers the exact same user interface (and some argue a better user experience due to the iPad’s typing problems) in a portable 3G platform with a camera for $300 LESS than the iPad? to many the afore mentioned pricing woes combined with the lack of functionality would appear to be a nail in the iPad’s coffin, but people tend to forget that apple always keeps some magical ploy up their sleeve.
in 2007 the original iPhone was released to a hungry public and quickly became the must have gadget of the year. all of this despite the fact that it had a $600 price tag. the iphone, however, did have one distinct advantage that the iPad lacks,it was (and in many ways still is) revolutionary. with all of the afore mentioned hurdles that the iPad faces one might wonder how i can ever succeed as a $500 superfluous (after all its not completely useless) netbook style tablet in a recession, when both of it’s two largest competitors cost $200 and $250 repectively? put bluntly, it can’t. apple knows that the iPad isn’t going to see any real financial success until it’s price is dropped considerably. to the average business man it would seem like madness to realease a product in a manner in which you know that you are going to make LESS money in your initial launch (after all this is the highpoint of most gadgets’ sales), but for apple it’s not madness, it is, in fact, quite genius.
for the past decade apple has has enjoyed a fabulous string of success through their premium, highly stylized products. from this success they have gained an incredible, seemingly unique, ability in the marketplace. apple can now release a product at an exorbitant price and slowly bring it down to the market standard. the advantage of this “expensive-to-cheap” pricing strategy is two fold; one, it allows apple to build a considerable amount of accessories and third party applications from the hype generated by the initial release, and it gives apple a small “grace period” in which they can have a relatively small group of every-day consumers use their product, allowing them to find and software or hardware issues without the risk of having to institute a large product recall should something go wrong . with these advantages it would be safe to say that any company which has the option to release their product in this manner would be foolish not to do so. all of that said all evidence (both historical and contemporary) suggest that the price will probably drop by at least $100 by mid-July.
what does all of this jargon mean to the average consumer who just wants the iPad? if you want the iPad wait until Q2 of 2010, you won’t regret it.
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