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Market watchers expect $329 iPad mini will justify its price to consumers

post #1 of 75
Thread Starter 
Though the starting price of the iPad mini is higher than many had expected, Wall Street analysts believe the storage capacity and build quality offered by Apple will be more than enough to court consumers and make the product a success.

Though Apple stock fell after Tuesday's iPad mini announcement with a $329 starting price, analysts are largely sticking by their price targets for AAPL stock. Chris Whitmore of Deutsche Bank said pricing of the iPad mini was a "modest disappointment," but he still expects the product to perform well.

Whitmore said the features of the iPad mini are greater than he expected, particularly capacity. He and others assumed Apple would offer an 8-gigabyte entry-level model to reach a lower price point, but the starting capacity for the iPad mini is 16 gigabytes.

iPad mini


He also said the build quality of the iPad mini "looks and feels outstanding," which will justify the premium pricing of the iPad mini over competitors like the Amazon Kindle Fire HD and Google Nexus 7.

"Due to the high quality of the hardware, we expect the device will be very well received by consumers once they have an opportunity to test it," Whitmore said. Deutsche Bank has reiterated its price target of $850 for AAPL stock.

Charlie Wolf with Needham & Company expects the iPad mini will expand the tablet market and also make it difficult for competitors in the smaller, less expensive market segment.

"Starting at $329, Apple left a modest price umbrella for competing 7-inch tablets," he said. "However, none compare with this device, in our opinion, which is a fully featured iPad except for its size. All 275,000 iPad applications can run on it without modification."

Wolf admitted that the iPad mini may cannibalize some sales of the full-size iPad, but he expects it to greatly expand the market for iPads. Needham & Company continues to recommend that investors buy AAPL stock with a price target of $750.

iPad mini


Canaccord Genuity's Michael Walkley also believes Apple's pricing of the iPad mini will allow the company to maintain dominant market share of the growing tablet market. He said Apple provides better hardware along with a more integrated and robust user experience than competing, lower priced tablets.

Shaw Wu of Sterne Agee originally predicted that the iPad mini would be priced between $299 and $349, so he wasn't fazed by the $329 price. He noted that Apple has a strong track record of optimizing volume and profits, unlike most competitors who need to price low to compete in the market.

"We continue to believe iPad mini is the competition's worst nightmare and likely to drive incremental volume," he said.

iPad mini


Rob Cihra of Evercore Partners still believes Apple will eventually phase out the iPad 2, as he sees less of a market for it with a $329 iPad mini available. He also believes the iPad mini will help Apple capture and even larger share of the tablet market, and he has reiterated an "overweight" rating for AAPL stock with $800 price target.

Morgan Stanley's Katy Huberty compared the iPad mini to the iPod mini, as both products launched roughly two-and-a-half years after the debut of the original model and with about a 17 percent discount.

"In other words, Apple has experience extending a product line to a smaller, cheaper form factor," she wrote. "In the case of iPod mini in 2004, total iPod shipment growth accelerated to 469% (year over year) in the year following the launch vs. 212% (last 12 months') growth."

Brian White with Topeka Capital Markets called the iPad mini an "absolute homerun for Apple." He was at Tuesday's event and had hands-on time with the device, and came away impressed.

"It felt every bit as good in our hand as we had expected, especially with the more refined aluminum casing that includes the colors of the iPhone 5 (i.e., black and slate and white and silver)," White wrote. "The device comfortably fits in one hand and can be carried in our sport coat pocket."

Maynard Um of Wells Fargo Securities believes that Apple arguably has its strongest product lineup in the company's history. He expects Apple to take a bigger portion of the consumer wallet while its products will cause customers to delay purchases of other consumer electronics items such as PCs.

Finally, Gene Munster with Piper Jaffray said the iPad mini has given him greater confidence that the iPad will be a bigger part of Apple's story moving forward. He believes the device's main feature is price, followed by its size.

"While some investors may claim this is a departure from innovating on technology for Apple, we believe it is how Apple furthers markets in which it is dominant, using the iPod as a historical precedent," he said.
post #2 of 75
Can't wait to hold one of these and see how light it is. Mildly disappointed in price, but I'm sure Apple knows more about their margins than I do ;-)
post #3 of 75
Apple should have pitched this differently. They should have pitched this as a smaller form factor iPad that has all the capabilities of its big brother but with a thinner and lighter design and more affordable price. By bringing up the Nexus in the keynote they inevitably brought in the comparisons to cheaper tablets. And of course then the biggest focus will be on price.
post #4 of 75
Oh and th stock is up $10 so far today, so this meme that the stock dropped $20 yesterday because of the iPad mini price is mostly bunk.
post #5 of 75
I was a little put off by the price until I realized that I was succumbing to Techie Boi Syndrome, a condition marked by a stringent belief that all tech products are made for me alone and should conform to that, otherwise be subjected to bib-dribbling and endless clichés such as "EPIC FAIL" and company X being "FTW."

While $330 is nothing to sneeze at, there might just be a large swath of consumers who want an iPad but not the 10-inch version, seeing the mini as the product they want. This is something incomprehensible to techie boyz, who are more concerned with sepcs and a weird compulsion to have *both* products, or at least give the impression that they do (i.e., one for every room in the house because that's how they spend their money. Other people aren't like that and will never be.)
post #6 of 75
Quote:
Originally Posted by allenbf View Post

Can't wait to hold one of these and see how light it is.

 

It's half the weight of an iPad.

Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #7 of 75
I can't imagine how anybody would be disappointed by the price.
post #8 of 75
Quote:
Originally Posted by Rogifan View Post

Apple should have pitched this differently. They should have pitched this as a smaller form factor iPad that has all the capabilities of its big brother but with a thinner and lighter design and more affordable price. By bringing up the Nexus in the keynote they inevitably brought in the comparisons to cheaper tablets. And of course then the biggest focus will be on price.

 

You're presuming consumers see 'cheaper' and always go for that, when if history is any indicator the opposite is true. Apple makes premium products and this fits perfectly in line with that.

Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #9 of 75
Quote:
Originally Posted by Rogifan View Post

Oh and th stock is up $10 so far today, so this meme that the stock dropped $20 yesterday because of the iPad mini price is mostly bunk.

 

Apple's stock nearly always goes down on or after a keynote, the products announced are completely irrelevant when most, if not all analysts have no clue what's going on, and the amount of corruption and manipulation is the stock market game is astounding IMO. Especially with regards AAPL.

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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #10 of 75
Quote:
Originally Posted by Elian Gonzalez View Post

While $330 is nothing to sneeze at, there might just be a large swath of consumers who want an iPad but not the 10-inch version, seeing the mini as the product they want. 

 

But see that's what's a little concerning for investors, Apple doesn't make as much money on the mini as it does the full size. What's the long term path forward here? If the full size is selling like gangbusters what's the real need for the mini at all? Is it an acknowledgement that the market at 100 million sold is getting saturated so a new category makes sense or is it a bit of a hurried reaction to competition? Or does Apple kind of expect the mini to be more niche where the impact on the full size won't be major....questions questions...

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I'm not a pessimist. I'm an optimist, with experience.
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post #11 of 75
The Mini is, in many ways, the same machine as an iPad 2 so, for me, the easiest way to think about the Mini is to think about whether the iPad 2 is well priced and if a $70 price reduction is appropriate/attractive. For what it's worth, I think the iPad2 is well priced (in fact, I like the iPad 2 more than 3rd gen). And so the Mini is fairly priced.

I like the iPad 2 because, although the specs are slightly dated, I find that the iPad2 still zips along on iOS6. Other than wishing Apple had added Siri (clearly the 2 is capable of handling or the Mini could not - unless it's a microphone issue), I couldn't be happier with my 2 and imagine a Mini would also be satisfying.

I also had some more detailed thoughts on how to guide friends and family when they ask whether or not to buy the Mini. http://q10a1.blogspot.com/2012/10/ipad-mini.html
Edited by rare comment - 10/24/12 at 12:32pm
post #12 of 75
Quote:
Originally Posted by thataveragejoe View Post

 

Is it an acknowledgement that the market at 100 million sold is getting saturated so a new category makes sense or is it a bit of a hurried reaction to competition?

 

Saturated, lol. This is just the beginning.

Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #13 of 75
Quote:
Originally Posted by Elian Gonzalez View Post

I was a little put off by the price until I realized that I was succumbing to Techie Boi Syndrome, a condition marked by a stringent belief that all tech products are made for me alone and should conform to that, otherwise be subjected to bib-dribbling and endless clichés such as "EPIC FAIL" and company X being "FTW."
While $330 is nothing to sneeze at, there might just be a large swath of consumers who want an iPad but not the 10-inch version, seeing the mini as the product they want. This is something incomprehensible to techie boyz, who are more concerned with sepcs and a weird compulsion to have *both* products, or at least give the impression that they do (i.e., one for every room in the house because that's how they spend their money. Other people aren't like that and will never be.)


You know what the price of a carton of cigarettes is in NYC?  About $110.  I know people that go through a carton a month.  And for what reason?  To ruin their lungs.  Cost is a relative thing.  There are plenty consumers that don't just flip burgers for a living.  I'm sure pro athletes and drug lords won't question the price of an iPad Mini.

post #14 of 75
Quote:
Originally Posted by rare comment View Post

It's $70 less than the iPad 2 so, for me, the easiest way to think about this is whether the iPad 2 is well priced or not; they are, in many ways, the same machine. For what it's worth, I think the iPad2 is well priced (in fact, I like the iPad 2 more than 3rd gen).

 

Please explain. I've owned all iPhones, all iPads and a lot of Macs, a car, a motorbike, bikes, toys, board games, consoles and other stuff and I can say with my hand on my heart the iPad 3rd gen is the best product I've ever owned. The screen is what makes it for me. I'm still in awe of it 6 months on. It's one of the few products I've owned that I like as much now as I did on day one. And despite the resolution, my concern with it being more sluggish than iPad 2 as a result were unfounded, thankfully :-)

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post #15 of 75
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Originally Posted by Constable Odo View Post


You know what the price of a carton of cigarettes is in NYC?  About $110.  I know people that go through a carton a month.  And for what reason?  To ruin their lungs.  Cost is a relative thing.  There are plenty consumers that don't just flip burgers for a living.  I'm sure pro athletes and drug lords won't question the price of an iPad Mini.

 

I can't say that's the most compelling argument I've ever heard.

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post #16 of 75
Quote:
Originally Posted by thataveragejoe View Post

But see that's what's a little concerning for investors, Apple doesn't make as much money on the mini as it does the full size. What's the long term path forward here? If the full size is selling like gangbusters what's the real need for the mini at all? Is it an acknowledgement that the market at 100 million sold is getting saturated so a new category makes sense or is it a bit of a hurried reaction to competition? Or does Apple kind of expect the mini to be more niche where the impact on the full size won't be major....questions questions...

Why does this have to be an "either / or" product? I believe that there will be many consumers that buy both, or for that matter, several...
post #17 of 75
Quote:
Originally Posted by thataveragejoe View Post

 

But see that's what's a little concerning for investors, Apple doesn't make as much money on the mini as it does the full size. What's the long term path forward here? If the full size is selling like gangbusters what's the real need for the mini at all? Is it an acknowledgement that the market at 100 million sold is getting saturated so a new category makes sense or is it a bit of a hurried reaction to competition? Or does Apple kind of expect the mini to be more niche where the impact on the full size won't be major....questions questions...

Apple doesn't "react" to competition. Despite what tech blogs like us to think, the 10" iPad is by far the most popular size/tablet out there. What Apple doesn't want is to leave a hole in its product portfolio. If you are thinking of spending $300 on a 7" tablet, for $30 more you can get a 8" tablet and have access to 250,000 iPad specific apps in addition to the "regular" iOS apps.

post #18 of 75

I think it's priced a little high.  Oh well.

post #19 of 75

The analysts complaining about the price are all demand side in their mindset.  Seems to me, Apple picked a 'disappointingly' high price because of supply constraints.  What's the point of setting a lower price if you can't produce enough widgets to satisfy demand at that price?  It's either that or Apple is run by incredible morons who like leaving money on the table.

post #20 of 75
Quote:
Originally Posted by allenbf View Post

Can't wait to hold one of these and see how light it is. Mildly disappointed in price, but I'm sure Apple knows more about their margins than I do ;-)

 

Not sure why people are disappointed over the price of this thing? It's basically a shrunk down 3rd generation iPad... The price dropped $170 just by changing the size and display.

 

Are people assuming this is just an iPad 2? They need to look at the specs on Apple's page... http://www.apple.com/ipad/compare/

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #21 of 75

I think they needed to price it at $299.  If they were to sell 10 Million of these, they're down $300 Million but they knock the competition out of the water and lock 10 million consumers into the ecosystem.  These 10 million are nearly guaranteed to buy the next iteration.  Short term loss for a lock of the market.  They should have done it.

post #22 of 75
Quote:
Originally Posted by thataveragejoe View Post

 

But see that's what's a little concerning for investors, Apple doesn't make as much money on the mini as it does the full size. What's the long term path forward here? If the full size is selling like gangbusters what's the real need for the mini at all? Is it an acknowledgement that the market at 100 million sold is getting saturated so a new category makes sense or is it a bit of a hurried reaction to competition? Or does Apple kind of expect the mini to be more niche where the impact on the full size won't be major....questions questions...

 

The real need for the mini is to have a product to sell to people who want a small tablet.  That segment has proved to be a significant market and Apple would be foolish not to fill a gaping whole in their product line.  Apple decided that it's better to make less profit on every iPad Mini sold then to have zero profit on every Nexus 7 sold by the competition.

 

Yes the iPad Mini will cannibalize some iPad sales but Rule No. 1 on Cannibalization:  You better cannibalize your own product or your competitor will do it for you.

post #23 of 75

Agreed this should have been $299 if Apple really wanted to deliver a knockout punch to imitation Android market.  Probably the most amazing part of the original iPad's introduction was the price!  Everybody.. and I mean Everybody expected it to cost around $700-800.  When Steve said $499 people's jaws literally dropped.  You could pretty much say the opposite happened with the mini announcement, as the price was higher than most people expected.  Especially considering its using the guts of a 2 year old iPad2.  

 

While I have no doubt Apple will sell every one they can make this holiday season at the advertised $329 price, I dont understand why they continue to let Android's "me-too" products hang around.  They have a $100Billion in the bank, its not like they NEED the extra $30 in profit off each mini sale.  I strongly believe most people want an iPad, when they look at whats available in tablet selection.. but many just cant afford the steeper price.  Pricing the mini at $299 instead of $329, would have a psychological reinforcement on the people's desire to want an iPad.. and accept nothing else.  

 

I also think the $299 mini price was important because its so low it could become the "gateway drug" into Apple's products.  For the longest time I was on the other side of the fence.. one of those people who believed Apple's products were overhyped, overpriced and delivered less performance than the competition.  My gateway experience was the $229 iPod nano.  After buying several mp3 players in 2004 & 2005.. from makers like Creative Labs, iRiver, flash memory makers.. and being a bit disappointed in them.  I finally gave the $229 Nano a try, mainly because it was cheap enough that I was willing to give it a try.  The Nano worked so much better than every other mp3 player I had used, that I couldnt believe I waited so long to buy a real iPod.  And it wasnt just me, my girlfriend used it.. weeks later she bought one.  Same happened with my best friend.  The point is, the price needs to be low enough that people will give the "Apple experience" a try.  Once they've taken a bite, they understand why Apple products cost more.. because the entire experience delivers more.  From the packaging, to the Apple store, to the user experience, to the software, to the appstore, to the build quality to even the resale value.  You just dont get the same expereience with the "me too" imitation stuff. 

 

That $229 Nano I bought in '05, led me to buy the $199 iPhoneGS3 in June '09.  Which lead me to buy the $999 Macbook in 2010.  Which lead me to buy the $179 Extreme router, $99 ATV and $499 iPad in 2011.   Before I knew it.. the $229 Nano had turned my house into $3000 worth of Apple electronics over a period of 5 years.  Im sure there are many people out there who share the same Apple story I do.

post #24 of 75
Quote:
Originally Posted by AppleInsider View Post

Though the starting price of the iPad mini is higher than many had expected, Wall Street analysts believe the storage capacity and build quality offered by Apple will be more than enough to court consumers ...

 

People always offer this nugget of advice whenever Apple releases a product that's "expensive" relative to the competition and it makes little sense.  

 

In the first place, the Nexus 7 is not exactly crap in terms of it's hardware build quality.  Sure Apple products are usually tops in build quality, but the next rung down on that same ladder isn't "shite," it's merely "ever so slightly less" (quality).  Is the iPad mini's build quality so much better than the Nexus that it justifies being almost 50% more expensive.  No, not at all.  

 

Secondly, it ignores the millions and millions of people out there that don't value the high end materials Apple uses, or the environmental standards they adhere to.  It's as if they are arguing that the average consumer will go, "Well, it's really expensive, but it's made out of aluminium and glass and it's won some design award so I will buy it."  In fact, the consumer is more likely saying something like, "Well, it's expensive, but it's Apple and my kid wants an Apple, not an Android."  

 

The idea that average consumers put design, (and all the other high ideals of Apple) at the centre of their buying decision is mostly false IMO.  People appreciate build quality, but price is central to most people's buying decisions.  It's false to assert otherwise, and it's a facile dismissal of a realistic concern on the part of consumers.

 

Apple could easily have made iPad mini cheaper in a variety of ways, they just don't see that as a design or company goal.  

post #25 of 75
Quote:
Originally Posted by vqro View Post

I think they needed to price it at $299.  If they were to sell 10 Million of these, they're down $300 Million but they knock the competition out of the water and lock 10 million consumers into the ecosystem.  These 10 million are nearly guaranteed to buy the next iteration.  Short term loss for a lock of the market.  They should have done it.

 

Do you really think that you know more about Apple's market and customer profile than Apple itself?

post #26 of 75
Quote:
Originally Posted by Daekwan View Post

Agreed this should have been $299 if Apple really wanted to deliver a knockout punch to imitation Android market.  Probably the most amazing part of the original iPad's introduction was the price!  Everybody.. and I mean Everybody expected it to cost around $700-800.  When Steve said $499 people's jaws literally dropped.  You could pretty much say the opposite happened with the mini announcement, as the price was higher than most people expected.  Especially considering its using the guts of a 2 year old iPad2.  

 

While I have no doubt Apple will sell every one they can make this holiday season at the advertised $329 price, I dont understand why they continue to let Android's "me-too" products hang around.  They have a $100Billion in the bank, its not like they NEED the extra $30 in profit off each mini sale.  I strongly believe most people want an iPad, when they look at whats available in tablet selection.. but many just cant afford the steeper price.  Pricing the mini at $299 instead of $329, would have a psychological reinforcement on the people's desire to want an iPad.. and accept nothing else.  

 

I also think the $299 mini price was important because its so low it could become the "gateway drug" into Apple's products.  For the longest time I was on the other side of the fence.. one of those people who believed Apple's products were overhyped, overpriced and delivered less performance than the competition.  My gateway experience was the $229 iPod nano.  After buying several mp3 players in 2004 & 2005.. from makers like Creative Labs, iRiver, flash memory makers.. and being a bit disappointed in them.  I finally gave the $229 Nano a try, mainly because it was cheap enough that I was willing to give it a try.  The Nano worked so much better than every other mp3 player I had used, that I couldnt believe I waited so long to buy a real iPod.  And it wasnt just me, my girlfriend used it.. weeks later she bought one.  Same happened with my best friend.  The point is, the price needs to be low enough that people will give the "Apple experience" a try.  Once they've taken a bite, they understand why Apple products cost more.. because the entire experience delivers more.  From the packaging, to the Apple store, to the user experience, to the software, to the appstore, to the build quality to even the resale value.  You just dont get the same expereience with the "me too" imitation stuff. 

 

That $229 Nano I bought in '05, led me to buy the $199 iPhoneGS3 in June '09.  Which lead me to buy the $999 Macbook in 2010.  Which lead me to buy the $179 Extreme router, $99 ATV and $499 iPad in 2011.   Before I knew it.. the $229 Nano had turned my house into $3000 worth of Apple electronics over a period of 5 years.  Im sure there are many people out there who share the same Apple story I do.

 

Brilliant.  Absolutely agree with everything said here. 

post #27 of 75
Quote:
Originally Posted by mjtomlin View Post

 

Not sure why people are disappointed over the price of this thing? It's basically a shrunk down 3rd generation iPad... The price dropped $170 just by changing the size and display.

 

Are people assuming this is just an iPad 2? They need to look at the specs on Apple's page... http://www.apple.com/ipad/compare/

 

 

Disappointment was the wrong word, I guess.  I was just one of those who 1. Believed the iPad min was real all along and 2. Believed $249-$279 was the ideal range for the product.  I say this as a stockholder, not that it makes my opinion any more valid than another persons.

 

I have NO doubt Apple will sell millions of these, and I'll be getting one myself.  

post #28 of 75
Quote:
Originally Posted by Rogifan View Post

Apple should have pitched this differently. They should have pitched this as a smaller form factor iPad that has all the capabilities of its big brother but with a thinner and lighter design and more affordable price. By bringing up the Nexus in the keynote they inevitably brought in the comparisons to cheaper tablets. And of course then the biggest focus will be on price.

 

Just how many average customers do you think watch keynotes?

 

Normal people will see the advertisements, not keynotes.

post #29 of 75
Quote:
Originally Posted by mjtomlin View Post

 

Not sure why people are disappointed over the price of this thing? It's basically a shrunk down 3rd generation iPad... The price dropped $170 just by changing the size and display.

 

Are people assuming this is just an iPad 2? They need to look at the specs on Apple's page... http://www.apple.com/ipad/compare/

 

It is in fact, very very close to the exact specs as an iPad 2.  It has better wireless and cameras and that's about it.  

 

Also, those particular items are dropped in mostly because the prices on them have come down in the interim so that they are price identical now with the stuff in the iPad 2 they replace.  So yeah, it is kind of like an iPad 2 but with a few easy improvements that don't cost them anything.  

 

If you look at it that way, the only real difference is size, and since everything is roughly half size, it should probably be $150-$200 by that calculation. 

post #30 of 75
Originally Posted by tundraboy  View Post
Has it ever occurred to you that maybe Apple didn't pick $299 because they know that they won't be able to build enough product to fill the demand at that price?


They can't build enough product to meet demand at $329. They can barely build enough at launches for $499 products.

 

Edit: Thiotimoline reply!

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post #31 of 75
Quote:
Originally Posted by Snowdog65 View Post

 

Just how many average customers do you think watch keynotes?

 

Normal people will see the advertisements, not keynotes.

 

I must say that piano ad is possibly the best ad I've seen from Apple since "I'm a Mac" days. 

post #32 of 75
Quote:
Originally Posted by Daekwan View Post

Agreed this should have been $299 if Apple really wanted to deliver a knockout punch to imitation Android market.  Probably the most amazing part of the original iPad's introduction was the price!  Everybody.. and I mean Everybody expected it to cost around $700-800.  When Steve said $499 people's jaws literally dropped.  You could pretty much say the opposite happened with the mini announcement, as the price was higher than most people expected.  Especially considering its using the guts of a 2 year old iPad2.  

 

While I have no doubt Apple will sell every one they can make this holiday season at the advertised $329 price, I dont understand why they continue to let Android's "me-too" products hang around.  They have a $100Billion in the bank, its not like they NEED the extra $30 in profit off each mini sale.  I strongly believe most people want an iPad, when they look at whats available in tablet selection.. but many just cant afford the steeper price.  Pricing the mini at $299 instead of $329, would have a psychological reinforcement on the people's desire to want an iPad.. and accept nothing else.  

 

I also think the $299 mini price was important because its so low it could become the "gateway drug" into Apple's products.  For the longest time I was on the other side of the fence.. one of those people who believed Apple's products were overhyped, overpriced and delivered less performance than the competition.  My gateway experience was the $229 iPod nano.  After buying several mp3 players in 2004 & 2005.. from makers like Creative Labs, iRiver, flash memory makers.. and being a bit disappointed in them.  I finally gave the $229 Nano a try, mainly because it was cheap enough that I was willing to give it a try.  The Nano worked so much better than every other mp3 player I had used, that I couldnt believe I waited so long to buy a real iPod.  And it wasnt just me, my girlfriend used it.. weeks later she bought one.  Same happened with my best friend.  The point is, the price needs to be low enough that people will give the "Apple experience" a try.  Once they've taken a bite, they understand why Apple products cost more.. because the entire experience delivers more.  From the packaging, to the Apple store, to the user experience, to the software, to the appstore, to the build quality to even the resale value.  You just dont get the same expereience with the "me too" imitation stuff. 

 

That $229 Nano I bought in '05, led me to buy the $199 iPhoneGS3 in June '09.  Which lead me to buy the $999 Macbook in 2010.  Which lead me to buy the $179 Extreme router, $99 ATV and $499 iPad in 2011.   Before I knew it.. the $229 Nano had turned my house into $3000 worth of Apple electronics over a period of 5 years.  Im sure there are many people out there who share the same Apple story I do.

 

 

Has it ever occurred to you that maybe Apple didn't pick $299 because they know that they won't be able to build enough product to fill the demand at that price?  Apple is selling every phone and tablet they can build so it's very likely that supply constraints are to blame for the 'high' price.

 

At $299 people will complain about the supply shortage. At $329, people will complain about the price.  You're going to get skewered either way, might as well take the skewering that comes with an extra $30.

 

Thankfully, if the price proves to be too high, there is no law against changing prices.

post #33 of 75

$50 more and you can get a refurb 3rd gen iPad.

post #34 of 75
Quote:
Originally Posted by Gazoobee View Post

 

I must say that piano ad is possibly the best ad I've seen from Apple since "I'm a Mac" days. 

 

Agree. Loggia and Hanks in "Big".

post #35 of 75
Quote:
Originally Posted by Constable Odo View Post


You know what the price of a carton of cigarettes is in NYC?  About $110.  I know people that go through a carton a month.  And for what reason?  To ruin their lungs.  Cost is a relative thing.  There are plenty consumers that don't just flip burgers for a living.  I'm sure pro athletes and drug lords won't question the price of an iPad Mini.

 

People always used to complain about the MobileMe $100 a year price also, but it works out to $8 a month.  One and a half lattes at Starbucks and you are already spending more.  

 

When I tell people I buy a new iPhone and a new iPad each and every time a new one comes out they are generally shocked and think I'm wasting my money.  But then they pour $100 worth of gas into their $60,000 car and go off to a sporting event for which the tickets are hundreds of dollars a seat.  "Wasting money" and "expense" are in the eye of the beholder for sure. 

post #36 of 75
Quote:
Originally Posted by vqro View Post

I think they needed to price it at $299.  If they were to sell 10 Million of these, they're down $300 Million but they knock the competition out of the water and lock 10 million consumers into the ecosystem.  These 10 million are nearly guaranteed to buy the next iteration.  Short term loss for a lock of the market.  They should have done it.

I just can't understand the logic here.  First of all, they are the most valuable company in history, so their pricing strategies are obviously on the mark.  Secondly, they already own the market, so why on earth would they want to get involved in a race to the bottom?  Look at the LCD TV industry and you will see why that is a very bad idea.  If anything, $329 for an iPad mini is making the products around it look expensive...  $299 for an iPod touch when you can have an iPad mini for $329?

post #37 of 75
Quote:
Originally Posted by Tallest Skil View Post

 

Edit: Thiotimoline reply!

 

Bartender yells, "We don't serve your kind in here!"

 

A neutrino walks into a bar...

na na na na na...
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na na na na na...
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post #38 of 75
Quote:
Originally Posted by Gazoobee View Post

If you look at it that way, the only real difference is size, and since everything is roughly half size, it should probably be $150-$200 by that calculation. 

 

Only the case/battery/screen will cost less, the rest of the components don't get cheaper from a size reduction, and the new wifi/cameras likely cost more.

 

Now if those three components are 1/3 the cost of the device (Sticking with retail) that would 400/3 = $133.33 (components affected by size) and the rest is $266.67(components not affected by size).

 

Only the $133.33 is cut in half to $66.67, the $266.67 stays the same.

$66.67 + $266.67 = $333.34

 

No claim that this is how they arrived at the price, but it is more representative of how sizing drives cost.

 

There is no rational assessment that would deliver a $250 iPad Mini with Apple product margins.

post #39 of 75
Quote:
Originally Posted by Tallest Skil View Post


They can't build enough product to meet demand at $329. They can barely build enough at launches for $499 products.

 

Edit: Thiotimoline reply!

Didn't know you were a science-fiction fan. Learn sumthin new everday.

melior diabolus quem scies
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melior diabolus quem scies
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post #40 of 75
If you don't like the $329 price, just wait six months. Apple charges early adopters a premium. It's the "me got it first" tax. It will fall to $299. All will be good.
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