Tag Archives: pricing
(No, this post is not about a new protective cover that wraps around Apple’s second-generation tablet ever more tightly.)
Breaking a bit with tradition at the debut of the iPad mini, Apple did not keep the previous version of the iPad 3 in the lineup with the release of the fourth-generation iPad. Instead, it eliminated the third-generation iPad and instead left the slower, second-generation (iPad 2) product in the lineup. About the only possible explanation for this was that Apple couldn’t get the price of the third-gen iPad down to the $399 price point it was seeking to address competition in the 10″ Android tablet category. Costs have also likely come down more on the iPad 2 components so that that product can now be more profitable at $399.
However, it also puts the older iPad 2 closer to the new iPad mini that shares its processor and resolution. This begs the question, what is the case for the iPad 2 given that the iPad mini is 80 percent of its size and identical in most other respects. In fact, the iPad mini’s cellular models can connect to LTE networks whereas the iPad 2 is limited to 3G.
As smartphone trends clearly show, there is a large group of consumers that will flock to the larger screen. There’s also something to be said for having a product below a pricing milestone ($350) and another below $400. But, all things being equal, and most are in this case, the iPad mini just seems a bit too close to the 10″ iPad’s price and capabilities. The lineup would have been a bit cleaner with either the iPad mini at $299 or the third-gen iPad between Apple’s latest tablets.
Over at Technologizer, Harry McCracken has a great post comparing some of the early skepticism around the iPad to that of the iPhone; it was a topic that came up in the TUAW Talkcast that I participated in last night. Personally, while I certainly remember some skepticism regarding the lack of a physical keyboard or 3G (the latter ultimately addressed) in the original iPhone, I remember the overall reaction as far more positive than that for the iPad. Most people were impressed by the iPhone, but turned off by its pricing whereas the iPad pricing has been perceived as quite reasonable or perhaps even aggressive.
But is it? Over at The NPD Group Blog, I’ve provided my take on its value versus standalone electronics, but let’s look at more directly competitive products. The answer is yes if you compare it to Tablet PCs or Apple’s notebooks, maybe if you compare it to netbooks, and not so much when you compare it to some of the other large tablets introduced by startups in the past year, at least on the face value of hardware.
Take, for example, the embattled Joojoo by Fusion Garage, which also intends to debut at $499. It has a 12” capacitive touchscreen as opposed to the iPad’s 9.7” screen, and it can handle Flash and Hulu, albeit with only half the battery life of the iPad. Then there’s Always Innovating’s Touch Pad with an 8.9” touchscreen and a keyboard attachment that turns it into a functional, albeit non-Windows-based, netbook. Like the iPad, it boasts ten hours of battery life and costs just $299 or $399 with the keyboard.
Neither of these products blow away the iPad in terms of absolute pricing or value, but remember that they are from small startups with no brand and are producing limited volumes compared with the millions of units that the iPad will likely ship in 2010. The iPad’s price is a breakthrough judged against the fictional rumors that preceded it, rumors that may have been based on features and added cost it did not have. Not to take anything away from the engineering that went into offering the iPad at its price, but it’s pretty easy to hit a bullseye when the rest of the world is giving you the side of a barn on which to paint it.
I certainly agree with Verizon CEO Lowell McAdam that mainstream consumers will be in no hurry to abandon the subsidy model. But in addition to seeing whether more sophisticated customers will shell out $200 or more to run advanced wireless devices on Verizon’s network, we have to see how Verizon will price open access before understanding the impact it will have on new or integrated devices in the market.
McAdam acknowledges that consumers won’t sign up for multiple $50 per month plans, and at Gearlog, Sascha Segan notes that Verizon might offer incremental device access for $5/month. This is the kind of scheme that Sprint has talked about for Xohm as well although Sprint has acknowledged there should be an unlimited access cap.
There are already a number of devices other than handsets that are obvious candidates to work on a high-speed wireless network — portable navigation devices, handheld gaming consoles, MP3 players/Internet radios, and more. Consumers are already buying these devices. Sure, adding WAN modems would add cost, but it’s really the high price of wireless broadband that is holding them back. Verizon needs to offer a cheap tier of service that entails either limited data or limited speed. Such pricing would go a long way toward enabling the kind of creative innovation that Dash Navigation has enabled with only a GPRS connection at its disposal.