Apple could cut iPad prices if the device isn't selling well, the Wall Street Journal reports.
According to Credit Suisse analyst Bill Shope, who met with Apple executives Sunday night, Apple indicated that it would slash iPad prices if the device didn't sell enough units.
"While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated)," Shope wrote in a post-meeting note.
The iPad is already priced aggressively, at just $499 for the starting model (16GB, no 3G) - much less than initially expected (UK pricing has yet to be announced. Wi-Fi models shipping in late March.
3G models shipping in April.)
Apple is perhaps bolstering itself against the potentially lackluster iPad market - since the announcement of Apple's wonder-tablet, the iPad has been under constant fire with regard to its name, its lack of a camera and multitasking, and the argument that the iPad is just a giant iPod touch.
Online consumer marketplace Retrevo reports that the number of people who have heard about the tablet but are uninterested in buying one, has doubled from 26 per cent (before the tablet's unveiling) to 52 per cent.
The flexibility in pricing is reminiscent of the iPhone's release in 2007 - when Apple slashed the price of the iPhone by $200 just two months after the phone's debut.
Also in Shope's post-meeting note: Despite what some believe, Apple officials don't think that the iPad is in danger of "cannibalising" other Apple lines.
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According to the execs, there is a clear "segmentation of capabilities" that suggests "cannibalization may be less of a concern than most currently believe."
By remaining flexible on pricing, it might seem as though Apple is prematurely predicting a failure of sorts in its iPad. Of course, we must remember that the iPad is a tablet in a (mostly) tablet-less world. Apple has a history of changing the world with its technologies (think about the MP3 market before the iPod), and perhaps erring on the cautious side is the way Apple does it.
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Comments received
jbrinkler said on Tue, 09 Feb 2010
There are two things that are missing that would make this a 'must have' device. A front facing camera for video chat and the ability to multitask, somthing that lacks on the iPhone. If Apple had these, they wouldn't have to worry about the iPad not being a sucsess. I would be the first in the que to purchase one.
treadmill said on Tue, 09 Feb 2010
Agree on the above comment. I will certainly be waiting for the next generation.
Apple may have to slash prices in order to shift appropriate quantities.
Che said on Tue, 09 Feb 2010
Agreed
But needs a real OS. Until then I will happily go for an alternative - if I ever find the need.
Dragonfly said on Tue, 09 Feb 2010
Doubt I'd get one, not sure how I'd justify it yet. 'Sofa surfing' seems the most probable use but I'd probably prefer a laptop for that as it has Flash support.
I'd probably also use my TV for watching Videos and my hifi / iPhone for listening to music. A lot of e-Readers (with e-ink) are also getting cheaper now, so would probably opt for one of those if I needed one.
Unlike the iPhone, I'm not sure the need for an 'all-in-one' (master of none) translates well into a non mobile device. You'd just use the product, you already have in your home, that does a better job.
Gee4orce said on Tue, 09 Feb 2010
Is this what passes for journalism at the WSJ these days ? "Company could cut price of product to sell more".
Really. If that's the case, I have a couple of important stories for them about the religious inclination of the pontiff, and the toilet behaviour of bears...
controcorrente said on Tue, 09 Feb 2010
The cool thing is that, I think, melerly making the assertion that the WSJ has made, will make many more wait for Apple to lower prices before even considering a purchase.
Still think I will wait for V2 but if the pricing was considerably lower...
greendave said on Tue, 09 Feb 2010
Wake up - this story is about a note that the analyst wrote post-meeting. He does not even claim that is what Apple said, just what he wrote down. Furthermore, people do not speak with brackets around their sentence. It would appear the Apple guy may have said "nimble" - which could just as easily mean they can quickly add features to increase the value rather than drop the price, in the same way they have been doing for years with the iMacs and MacBooks!
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