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Execs say Apple could lower iPad price if market demands it - report

post #1 of 100
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If the market does not respond well to the iPad and its price range of $499 to $829, Apple executives have reportedly said they could be "nimble" on its cost.

Analysts with Credit Suisse met Sunday night with Apple executives, and according to The Wall Street Journal, company officials indicated they could become even more aggressive in pricing the hardware. Currently, the 16GB model without 3G will cost $499 when the hardware debuts in March.

"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)," analyst Bill Shope wrote.

When Apple revealed the iPad with a $499 starting price, it caught many off guard. Previously, analysts had expected the new touchscreen tablet to cost around $1,000.

To add 3G connectivity to the iPad comes with a $130 premium, making the 16GB model $629. The iPad will offer up to 64GB of capacity which, when paired with a 3G radio, will make the device cost $829 at its highest price. The 3G model is expected to ship by the end of April.

Apple made waves in 2007 when, less than two months after the iPhone debuted, the Cupertino, Calif., company slashed the price on its handset by $200. Apple began selling its 8GB first-generation iPhone for $399, down from its initial asking price of $599.



Another option to lower the price of the iPad could be carrier subsidies. Last week, a rumor surfaced that wireless carrier Hutchinson Austria plans to offer a 333 euro rebate on the iPad if customers agree to a two-year contract with 5GB of data each month for 29.90 euros.

So far, only the U.S. iPad data plan has been revealed. Carrier AT&T will offer 250MB of data per month for $15, or unlimited access for $30. Both plans come with no contract and can be enacted or canceled directly from the iPad at any time. One report alleged Apple chose AT&T over Verizon for the iPad data plan because AT&T outbid its competitor by offering lower prices.
post #2 of 100
Ok. Apple lowered the iPhone's price as well.
post #3 of 100
I doubt seriously any Apple execs really want to lose their jobs by saying any such thing unless officially sanctioned. If it were it would be as strange thing to say this far out.
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post #4 of 100
aka - First adopters, you've been warned, don't complain when the price drops by $100.
post #5 of 100
Quote:
Originally Posted by digitalclips View Post

I doubt seriously any Apple execs really want to lose their jobs by saying any such thing unless officially sanctioned. If it were it would be as strange thing to say this far out.

My thoughts too. I doubt if Bill Shope will get to attend the next meeting (if any) with Apple execs.
post #6 of 100
The only thing that seems out of whack to me is the $130 upcharge for the cellular mode/GPS. $50 - $75 seems far more reasonable. Here's to hoping...
post #7 of 100
"Currently, the 16GB model without Wi-Fi will cost $499 when the hardware debuts in March."

You mean WITH Wi-Fi, not without. It would be $499 without 3G.
post #8 of 100
If they can "nimbly" drop it to $350, I'm in. An overgrown iPod touch just is not worth $500 to me right now.
post #9 of 100
Considering the iPad's (future) capabilities/potential, $499 seems a tad high for only 16GB.
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post #10 of 100
Quote:
Originally Posted by Kolchak View Post

If they can "nimbly" drop it to $350, I'm in. An overgrown iPod touch just is not worth $500 to me right now.

it's worth it for me, if i can use this with the features it has as well as use a VNC app to run apps on my 27" iMac, it's perfection. I consider it a 'portal' device. It's an appliance that can do more than we can imagine right now.
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post #11 of 100
Quote:
Originally Posted by DocNo42 View Post

The only thing that seems out of whack to me is the $130 upcharge for the cellular mode/GPS. $50 - $75 seems far more reasonable. Here's to hoping...

Agreed. Is the cost of licensing use of the 3G protocol and the hardware to use it cost enough to warrant that much of a price difference? Seems too high to me as well.

Quote:
Originally Posted by extremeskater View Post

This is code for the foolish early adopters that will stand in line the first week. This is great because what will happen is they will get ripped off and the rest of us will the the 32gb for the price the discontinued 16gb a few months later.

This is exactly why I never buy the first iteration of any product, even from Apple. I also never buy the high end model of anything because in 6 mos. it will be the medium or usually low end model.

An iPad would be a tremendous addition to my MacBook Pro for working, but until they come out with a selection of textbooks and technical manuals relevant to my field, and a durable mark-up protocol that will let me make and keep notes in those books, I will wait. And by then the prices will either go down, the features go up (hopefully both as is usually the case with computer technology), and the economy improves enough for me to warrant buying one.

Make no mistake, I want one, and the iPad represents the future of computing interfaces and technology, but right now it doesn't meet my needs for what I would use such a device for.
post #12 of 100
In regards to the original price drop on the iPhone, and the ensuing uproar from early adopters…

Apple was 'kind' enough to give them back, what was it?, $100…? But this was in Apple Store credit, I believe…

Keep in mind, there was no App Store at the time…!

So, maybe Apple fully intends to drop the pricing on the iPad after the initial early adopter rush, and will once again be 'kind' enough to refund some of the difference to said early adopters; again, in credit form…

Say, maybe for the App Store, or!, just maybe for the brand spanking new iBookstore; thereby artificially padding sales for the new media outlet…?!?

Am I now removing my Devils Advocate Hat, or is it just my Tinfoil Beanie…!?!

;^p
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post #13 of 100
Quote:
Originally Posted by DocNo42 View Post

The only thing that seems out of whack to me is the $130 upcharge for the cellular mode/GPS. $50 - $75 seems far more reasonable. Here's to hoping...

Dell charges $125 for their 3G card, why is Apple's pricing not reasonable. GSM royalties eat up almost all of it
post #14 of 100
I think the $100 premium for each storage step is the only challenge. I picture the device needing at least 32GB for what I picture myself using it for, but I would much rather pay $549 or $599 for the 64GB. That or drop the cost of the 3G version for the two upper models to $100 and $50 respectively.

I'm also a little surprised that they have 6 SKU's. So un-Apple like.
post #15 of 100
Quote:
Originally Posted by extremeskater View Post

This is code for the foolish early adopters that will stand in line the first week. This is great because what will happen is they will get ripped off and the rest of us will the the 32gb for the price the discontinued 16gb a few months later.

No it isn't. It's pure speculation. And if my memory serves me right weren't early iPhone adopters compensated in some form or another when the iPhone price dropped??

The Grey area in which i see a slow start for iPad at initial launch isn't so much the price, but the way in which the hardware change cycles affected the iPhone and iPod Touch.

I'm hearing this a lot from "Joe Blogs" who bought the iPhone 1st gen only for the 3G to turn up a year later. As most of the press are saying the iPad is just a big iPod Touch, some of this hype is getting across to the consumer and adding confusion.
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post #16 of 100
Apple's competitors were expecting Apple to come in at $999. They were all planning to under cut Apple at $499. Reports are shown they are stuck because they would cut deeply into profits going under $499.

You have to reasonable the 64GB Touch is $399.

Quote:
Originally Posted by Kolchak View Post

If they can "nimbly" drop it to $350, I'm in. An overgrown iPod touch just is not worth $500 to me right now.
post #17 of 100
I have no reception for AT&T at my house. Granted I'm in a rural area but Verizon works just fine. And with no flash player support for games and HULU what purpose would it serve.
post #18 of 100
Quote:
Originally Posted by DocNo42 View Post

The only thing that seems out of whack to me is the $130 upcharge for the cellular mode/GPS. $50 - $75 seems far more reasonable. Here's to hoping...

The IP rights licenses alone cost at least $30. It is cheaper than any unlocked data card I have seen; most list at $250 and get discounted to $150 with a contract and end up being free after a rebate. The premium does make it more likely that I will go with a WiFi only version though.
post #19 of 100
I don't think they would drop the $499 price point. I think that is low enough. What I could see is Apple dropping the 16 GB model and moving everything down a tier.
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post #20 of 100
Quote:
Originally Posted by Mr Underhill View Post

No it isn't.

Of course it is.

Quote:
Originally Posted by Mr Underhill View Post

It's pure speculation. And if my memory serves me right weren't early iPhone adopters compensated in some form or another when the iPhone price dropped??

They were compensated credit to the Apple store and were only given that because of the uproar they made when Apple dropped the price. Lets not make it out to be Apple offered that up when they dropped the price, it was well after that point.
post #21 of 100
Quote:
Originally Posted by Oldandintheway View Post

I have no reception for AT&T at my house. Granted I'm in a rural area but Verizon works just fine. And with no flash player support for games and HULU what purpose would it serve.

None for you it seems so I suggest you not purchase it.
post #22 of 100
Quote:
Originally Posted by aaarrrgggh View Post

I think the $100 premium for each storage step is the only challenge. I picture the device needing at least 32GB for what I picture myself using it for, but I would much rather pay $549 or $599 for the 64GB. That or drop the cost of the 3G version for the two upper models to $100 and $50 respectively.

I'm also a little surprised that they have 6 SKU's. So un-Apple like.

I agree, I expected to see a clip on module that used the dock connector to do 3g access or 1 model with 3g.
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post #23 of 100
Quote:
Originally Posted by Oldandintheway View Post

I have no reception for AT&T at my house. Granted I'm in a rural area but Verizon works just fine. And with no flash player support for games and HULU what purpose would it serve.

Are you saying the only thing the iPad would be useful for is watching streaming video from HULU? That's completely insane. Watching video on it is a great use, but it can do so many other things. Lack of Flash doesn't hinder the iPhone/iPod touch in the least.

I'm so confused when some people act surprised that there's no Flash support. It's widely known, as are the reasons behind it. (performance on mobile devices, security issues, business issues between Apple and Adobe.)
post #24 of 100
Quote:
Originally Posted by steviet02 View Post

Of course it is.



They were compensated credit to the Apple store and were only given that because of the uproar they made when Apple dropped the price. Lets not make it out to be Apple offered that up when they dropped the price, it was well after that point.

I see your point but when was the last time Dell, Hp et al gave a rebate for a price drop after you received your computer? Or honored your mail in rebate if it arrives a day after the due date? Apple's rebate was in response to people's bitching but it was also a very smart way to appease the early adapters and keep goodwill.
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post #25 of 100
I asked my dad if he was interested in one... to which he replied
"No thanks, i'm not menstruating"

Product name is so insanely horrendous, I honestly believe that Apple has gone insane with wealth.
Cutting the price point wouldn't be nearly as effective as cutting the name and calling it something that doesn't make people think of bloody feminine hygiene products.

I've talked to over 20 people about the iYuk and not a single one is considering buying one because of name alone. People don't even care what the tech is or what it can do for them... they can't get past the name.

Seriously... SJ has lost his mind. This product will always be a joke as long as it has a joke name. Zune is looking pretty brilliant right now as a name when you compare.

Bottom line... MILLIONS of people will avoid this product because of the name alone. Don't kid yourself, a pad is something disposable and you throw away. Think hundreds of years of psyche is going to change around the term 'pad' because SJ likes to tote one around? Wrong.
post #26 of 100
I doubt they'll have a need to drop the price. They did a good job of managing price expectations so that the $499 price already seems low to people.

When the iPad was first announced I had a "wait and see" attitude about it. But as the weeks have gone by I have begun to see a variety of situations where having the iPad really would be very handy, and better than having either an iPhone or a MacBook. I happened to be talking to a colleague the other day who has been going through the same process -- initially unsure what to make of it, but noticing more and more opportunities to use it in her life. The big difference between her and me, though, is that she is not a computer geek at all. She has a PC laptop at home that she almost never uses and an iPhone which she always uses. The iPad is already very attractive to her. I bet she buys one shortly after they come out, as will I.
post #27 of 100
Quote:
Originally Posted by steviet02 View Post

Of course it is.



They were compensated credit to the Apple store and were only given that because of the uproar they made when Apple dropped the price. Lets not make it out to be Apple offered that up when they dropped the price, it was well after that point.

If memory serves, Apple actually dropped the price by $200 yet only gave a $100 in-store credit.
post #28 of 100
[QUOTE=rain;1568240]I asked my dad if he was interested in one... to which he replied
"No thanks, i'm not menstruating"



Mock the name all you like, because yes for the 14 and under crowd it's quite the giggle-fest isn't it? Those that would shun a product purely because of its name probably aren't in the demographic Apple's targeting anyhow. Dunno... when I hear "iPad" I think of a pad of paper. Now maybe if they had gone with iSanitaryNapkin...
post #29 of 100
I was most surprised at the price points, but also surprised at the low capacities. After some thought I realized that most people won't be loading their iTunes libraries into their iPad which will free up a lot of space for Keynote presentations.

Normally I argue in support of consumer choice, something Apple is notorious for denying us, but I think Apple made a mistake offering two different models of iPad with different case designs. Instead of $499 for WiFi and $629 for WiFi + 3G, I think they could have done a single model with WiFi + 3G for $549.

I just picked up a used MacBook for $400 so I'm no longer interested in the iPad, but I was never very serious about wanting one.
post #30 of 100
Quote:
Originally Posted by Oldandintheway View Post

I have no reception for AT&T at my house. Granted I'm in a rural area but Verizon works just fine. And with no flash player support for games and HULU what purpose would it serve.

Really? The iPad has no purpose because it doesn't have flash? Maybe you should check out the website again to see what it can do.

There are a couple app's in the app store that are decent as well.
post #31 of 100
Quote:
Originally Posted by rain View Post

I asked my dad if he was interested in one... to which he replied
"No thanks, i'm not menstruating"

Check the definition of the word "pad" in the dictionary. Or if you're too lazy:
1 a : a thin flat mat or cushion: as (1) : a piece of soft stuffed material used as or under a saddle (2) : padding used to shape an article of clothing (3) : a guard worn to shield body parts against impact (4) : a piece of usually folded absorbent material (as gauze) used as a surgical dressing or protective covering (5) : a component of certain brake systems (as disc brakes) consisting of a plate covered with a frictional material b : a piece of material saturated with ink for inking the surface of a rubber stamp
2 a : the foot of an animal b : the cushioned thickening of the underside of the toes of an animal
3 : a floating leaf of a water plant
4 : a collection of sheets of paper glued together at one end
5 a (1) : a section of an airstrip used for warm-ups or turnarounds (2) : an area used for helicopter takeoffs and landings b : launchpad c : a horizontal concrete surface (as for parking a mobile home)
6 a : bed b : living quarters

These feminine product jokes have been used to death already. Give it up.
post #32 of 100
[QUOTE=PastorOfMuppets;1568256]
Quote:
Originally Posted by rain View Post

I asked my dad if he was interested in one... to which he replied
"No thanks, i'm not menstruating"



Mock the name all you like, because yes for the 14 and under crowd it's quite the giggle-fest isn't it? Those that would shun a product purely because of its name probably aren't in the demographic Apple's targeting anyhow. Dunno... when I hear "iPad" I think of a pad of paper. Now maybe if they had gone with iSanitaryNapkin...

Well, as a professional on such matters, I can assure you that the name will hurt sales.
I'm not mocking the name, however, every single person i've talked to about it is. And that sir, is something that can't be ignored.
And if you don't think every single branding company on the planet didn't choke on their coffee and go WTF??? when the name dropped at the keynote...

Personally, i'd love to see the surfPad succeed. I'm excited about designing content for it. {Inappropriate language deleted}
post #33 of 100
[QUOTE=PastorOfMuppets;1568256]
Quote:
Originally Posted by rain View Post

I asked my dad if he was interested in one... to which he replied
"No thanks, i'm not menstruating"



Mock the name all you like, because yes for the 14 and under crowd it's quite the giggle-fest isn't it? Those that would shun a product purely because of its name probably aren't in the demographic Apple's targeting anyhow. Dunno... when I hear "iPad" I think of a pad of paper. Now maybe if they had gone with iSanitaryNapkin...

Yes, I agree!
- iPad - so what? MS has had NotePad & WordPad in Windows for years, and people didn't get excited about it
- and notepad is a real word for something you write notes on
- what about Mouse-pad, for f-sake!
- so, all this fuss about iPad sounding like a sanitary-towel does seem a bit purile to me....

I think iSlate, or iTablet may have been 'cooler', but iPad works just fine, as it's just a vowel change away from iPod...
post #34 of 100
I think the lowering of prices will be a good move. It will attract more buyers and help to create more of a buzz about the product and the on-sale date. They can't bring it down too much though. They need to start high as prices will drop eventually. Let's wait and see.

I've been keeping up with iPadLot.com for the latest news and info.
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post #35 of 100
Quote:
Originally Posted by Rob55 View Post

Check the definition of the word "pad" in the dictionary. Or if you're too lazy:
1 a : a thin flat mat or cushion: as (1) : a piece of soft stuffed material used as or under a saddle (2) : padding used to shape an article of clothing (3) : a guard worn to shield body parts against impact (4) : a piece of usually folded absorbent material (as gauze) used as a surgical dressing or protective covering (5) : a component of certain brake systems (as disc brakes) consisting of a plate covered with a frictional material b : a piece of material saturated with ink for inking the surface of a rubber stamp
2 a : the foot of an animal b : the cushioned thickening of the underside of the toes of an animal
3 : a floating leaf of a water plant
4 : a collection of sheets of paper glued together at one end
5 a (1) : a section of an airstrip used for warm-ups or turnarounds (2) : an area used for helicopter takeoffs and landings b : launchpad c : a horizontal concrete surface (as for parking a mobile home)
6 a : bed b : living quarters

These feminine product jokes have been used to death already. Give it up.

You have no clue what your talking about.
The topic of psychological marketing and branding extends much much further then a dictionary definition.
post #36 of 100
Quote:
Originally Posted by nautilus. View Post

Considering the iPad's (future) capabilities/potential, $499 seems a tad high for only 16GB.

i agree...the smallest should be 32 gb

also to all of those complaining about flash and multitasking, do you like to recharge your devices often? so tired of reading about it
post #37 of 100
Quote:
Originally Posted by extremeskater View Post

This is code for the foolish early adopters that will stand in line the first week. This is great because what will happen is they will get ripped off and the rest of us will the the 32gb for the price the discontinued 16gb a few months later.


At least it works and Apple compensated all iPhone early adopters, hey what happened when foolish millions took Vista, no working operating system and MS took their money to bank

If you believe this story then you foolish as early adopters, as if Apple going to release their marketing strategy to consumers/ speculation as usual.
post #38 of 100
I want someone to go generate me a cost breakdown of all of the components in this device and tell me if you get 500 bucks worth. Just saying. Waiting to be proven wrong.

Also.

I never thought this thing should be 1,000. Meanwhile, the "analysts" did. I had no analyst talk to me however.
post #39 of 100
Quote:
Originally Posted by rain View Post

You have no clue what your talking about.
The topic of psychological marketing and branding extends much much further then a dictionary definition.

My point was that there are numerous other uses of the word pad that it seems juvenile that some people would fixate on the feminine product connotation. So yes, I obviously realize that the name of a thing can have an effect on it's performance in the marketplace or the public's perception of said item but really, iPad sounds no more like Maxipad than mouse pad does. Or does mouse-pad make you think of feminine products for rodents?
post #40 of 100
I doubt that Apple will go lower than $499 for the basic version.

I have a feeling they are talking about the 32GB and 64GB versions: I can't believe that a 64GB flash drive costs $200 more than a 16GB (OK, perhaps a bit less, allowing for a proportionally higher profit at the same margin).
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