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Apple exec Phil Schiller defends $329 entry price of iPad mini

post #1 of 230
Thread Starter 
Apple marketing chief Phil Schiller has publicly come to the defense of the $329 entry price of the iPad mini, saying he believes customers are willing to pay for quality that rivals like Amazon and Google don't offer.

At $329, the iPad mini is more expensive than the $199 cost of the 16-gigabyte Amazon Kindle Fire HD, or the $249 16-gigabyte Google Nexus 7. But Schiller, Apple's senior vice president of Worldwide Product Marketing, told Reuters that he believes Apple's new 7.9-inch iPad mini is a superior product that earns its higher price point.

"The iPad is far and away the most successful product in its category," Schiller said. "The most affordable product we've made so far was $399 and people were choosing that over those other devices.

"And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that."

GPS


The Nexus 7 was specifically called out by Schiller during his presentation at Apple's iPad mini media event on Tuesday. There he made the case for Apple's 7.9-inch display with a 4:3 aspect ratio, which offers over a third larger display area than the 7-inch display on Google's tablet with a 16:9 aspect ratio.

Schiller also noted that when Android controls are taken into account when browsing a website, the display area is 49 percent larger on the iPad mini in portrait mode than with the Nexus 7, and 67 percent larger in landscape mode.

For their part, analysts on Wall Street generally agree with Schiller's sentiment, as most have indicated they believe the iPad mini will justify its $329 price to consumers. In particular, Apple's build quality, hardware performance, integrated software and strong application ecosystem are seen as key advantages over competitors like the Nexus 7 and Kindle Fire HD.
post #2 of 230

Why does he have to defend it? It's an Apple product. They know how to price them properly. 

post #3 of 230

The problem is not that it's too high compare to Nexus7 or Kindle Fire HD. It's comparing with the iPad 4 for $499 and refurb iPad3 for $379 that's problematic!

post #4 of 230
Quote:
Originally Posted by Tallest Skil View Post

Why does he have to defend it? It's an Apple product. They know how to price them properly. 

 

Because nothing generates hits more than a scandal. So when there isn't one, the media will trump one up 

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post #5 of 230

The ONLY reason this products is $329 and not $299 is because the iPod touch is $299.  

post #6 of 230
Quote:
Originally Posted by Tallest Skil View Post

Why does he have to defend it? It's an Apple product. They know how to price them properly. 

Sure enough, there is the price for the components plus some margin on top and voilà there is the market price of the product. And the price is reasonable if you look under the hood. This iPad mini is built to perfection so yeah why and where did he have to defend what seems just right?

post #7 of 230
Originally Posted by cpenzone View Post
The ONLY reason this products is $329 and not $299 is because the iPod touch is $299.  

 

That can't be said.

post #8 of 230
"Why does he have to defend it? It's an Apple product. They know how to price them properly."

Because some people don't understand math...

A 7.9" iPad with a 4:3 aspect ratio has 40% more screen space than a 7" 16:9 Android tablet.

We are measuring AREA. Diagonal length is deceptive.

Who is being deceptive to customers?
post #9 of 230
Apple certainly doesn't need my advice to succeed as a company, but to me, they underestimate how much difference there is in the mind of the typical consumer between a pricetag that starts with a "2" as opposed to a "3"...But what do I know!
post #10 of 230
Quote:
Originally Posted by drobforever View Post

The problem is not that it's too high compare to Nexus7 or Kindle Fire HD. It's comparing with the iPad 4 for $499 and refurb iPad3 for $379 that's problematic!

 

You're actually comparing the iPad Mini to THAT junk?

 

They're not even in the same league, User Experience-wise. And User Experience is everything. 

 

The Nexus7 and Kindle Fire HD are FINISHED. The moment Apple unveiled the Mini, was the beginning of the end for the tablet competition, who are having a helluva time against Apple as it is. 

post #11 of 230
This is just fine. The same cheapskates whining about the iPad mini's price are the same ones who complain about overpriced BMWs and Porsches, as they spit diatribe out the window of their Ford Pintos.

The world needs ditch diggers, too.
post #12 of 230
I think he is right. The Nexus 7 is a very nice device, but in terms of build quality it's no iPad. The aluminium & glass make for a premium product and it is priced accordingly. $299 would have been nice but these will sell very well indeed at the current price point.

Next year it'll probably drop once the Android devices continue the race to the bottom and hit $99
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post #13 of 230

It should have been $299.
 

post #14 of 230

OMG he actually just trundled out that "if people pay it, it isn't too high" bullish*t.  

 

Very sad.  

One can sell a lot of things at a ridiculously high price, that doesn't mean it's fair or right.  

 

Also, ... did anyone else but me think the screen size comparisons were a bit dubious?  A lot of browsers do full-screen now.  Technically, Chrome on Android still doesn't, but removing the menu bars etc. as part of the "analysis" is still a bit disingenuous viewed that way.  

 

It felt kind of dirty to me to present it that way. 

post #15 of 230
Quote:
Originally Posted by Tallest Skil View Post

Why does he have to defend it? It's an Apple product. They know how to price them properly. 


Yeah he really should come to AI to get some help running company.

post #16 of 230
Quote:
Originally Posted by drobforever View Post

The problem is not that it's too high compare to Nexus7 or Kindle Fire HD. It's comparing with the iPad 4 for $499 and refurb iPad3 for $379 that's problematic!


that also killed the ipod mini...oh wait.

 

Apple isn't going for cheapskates. They're going for the 10"-ipad-is-too-expensive-but-i-want-one-anyway demographics.

post #17 of 230

Like I said yesterday, $329 is a fine price for the Mini.

 

If you think that it's too much, then don't buy one, go buy something else. Apple is going to move plenty of iPad Minis at the $329 price point. You should be glad that the bogus 8GB rumor turned out to be false.

post #18 of 230

Phil- "Now let me compare this Nexus 7 to a device that is 40% more expensive... isn't it just magical how much better it is than a product almost half it's price?"

 

What a dumb marketing technique.

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post #19 of 230
Quote:
Originally Posted by Gazoobee View Post

OMG he actually just trundled out that "if people pay it, it isn't too high" bullish*t.  

 

Very sad.  

One can sell a lot of things at a ridiculously high price, that doesn't mean it's fair or right.  

 

Also, ... did anyone else but me think the screen size comparisons were a bit dubious?  A lot of browsers do full-screen now.  Technically, Chrome on Android still doesn't, but removing the menu bars etc. as part of the "analysis" is still a bit disingenuous viewed that way.  

 

It felt kind of dirty to me to present it that way. 


what's fair or right? Last time I checked, the right to buy iPads at a fair price isn't in the constitution. If it's too expensive for you, don't buy it. The iPad mini is still closer to 8" than the 7" tablets out there.

post #20 of 230
Quote:
Originally Posted by Gazoobee View Post

Also, ... did anyone else but me think the screen size comparisons were a bit dubious?  

 

Not at all. The Mini is a 4:3 tablet, those other shoddy Android tablets are 16:9. That makes a huge difference. 

post #21 of 230
Quote:
Originally Posted by macinthe408 View Post

This is just fine. The same cheapskates whining about the iPad mini's price are the same ones who complain about overpriced BMWs and Porsches, as they spit diatribe out the window of their Ford Pintos.
The world needs ditch diggers, too.

 

What an insufferable, stuck-up, series of wild assumptions you are making here.  

 

Disagreeing about the price point of a single Apple product automatically makes a person some kind of trailer-trash ditch digger?  

It would be funny if it wasn't such an outrageously insulting and bigoted thing to say. 

post #22 of 230
Quote:
Originally Posted by Tallest Skil View Post

Why does he have to defend it? It's an Apple product. They know how to price them properly. 

Why do you need to criticize his defense?  He's an Apple executive.  They know how to respond properly.

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post #23 of 230
Quote:
Originally Posted by Tallest Skil View Post

Why does he have to defend it? It's an Apple product. They know how to price them properly. 
Bad headline. Not sure he thought he was defending it.
post #24 of 230
No Apology Necessary Phil. Go for it. Full Speed Ahead. By the way, Stay on top of the software development. What about iWeb. It was so easy to use. You need an "iWeb" type of offering for the consumers and the small businesses.
TomE
post #25 of 230
Quote:
Originally Posted by macinthe408 View Post

This is just fine. The same cheapskates whining about the iPad mini's price are the same ones who complain about overpriced BMWs and Porsches, as they spit diatribe out the window of their Ford Pintos.
The world needs ditch diggers, too.

And the same ditch digger can hit you over the head and bury your sorry ass in a hole in the ground for making such an insulting and retarded comment.

post #26 of 230
Quote:
Originally Posted by Gazoobee View Post

Also, ... did anyone else but me think the screen size comparisons were a bit dubious?  A lot of browsers do full-screen now.  Technically, Chrome on Android still doesn't, but removing the menu bars etc. as part of the "analysis" is still a bit disingenuous viewed that way.  

 

It felt kind of dirty to me to present it that way. 

Are you sure that average joe knows how to remove the menu bars?

 

Edit: I misread your comment, sorry. But what I wanted to say is even choosing a browser that can do full-screen or finding out how to do that feature average joe may not know. I thought Phil had done it right. Although choosing that website with the huge title was intentional.


Edited by mac-user - 10/24/12 at 9:48am
post #27 of 230
Quote:
Originally Posted by Gazoobee View Post

OMG he actually just trundled out that "if people pay it, it isn't too high" bullish*t.  

 

Very sad.  

 

Why?

 

Apple and anyone else can charge what the market can bear. Apple charges what they think their product is worth. It can be $3 or $3000. NO ONE is forced to pay either amount. 

 

Consumers have the choice to NOT pay and choose something else. If they DO buy the product in respectable numbers, then the asking price is vindicated. 

post #28 of 230

Apple is getting too defensive. Just do it and stfu.

 

It just tastes bad.
 

Hmmmmmm...
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Hmmmmmm...
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post #29 of 230
Quote:
Originally Posted by Quadra 610 View Post

 

You're actually comparing the iPad Mini to THAT junk?

 

They're not even in the same league, User Experience-wise. And User Experience is everything. 

 

The Nexus7 and Kindle Fire HD are FINISHED. The moment Apple unveiled the Mini, was the beginning of the end for the tablet competition, who are having a helluva time against Apple as it is. 

Since you have never used a Kindle Fire, what the hell do you know?  The Kindle Fire is actually a very nice tablet device that does exactly what it is advertised to do.  It is far better than the other tablet devices out there, and Amazon continues to sell many of them.  Despite what you believe, it is very easy to use and has a nice user-experience.  Why do you think Amazon continues to develop them and release new versions?  They sell well for Amazon, so good for them.

post #30 of 230

Setting a high price avoids supply constraints Apple likely faces.


Edited by Cpsro - 10/24/12 at 9:49am
post #31 of 230
Quote:
Originally Posted by Gazoobee View Post

What an insufferable, stuck-up, series of wild assumptions you are making here.  

Disagreeing about the price point of a single Apple product automatically makes a person some kind of trailer-trash ditch digger?  
It would be funny if it wasn't such an outrageously insulting and bigoted thing to say. 
Wouldn't that be more prejudiced than bigoted?
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post #32 of 230
Quote:
Originally Posted by Tallest Skil View Post

Why does he have to defend it? It's an Apple product. They know how to price them properly. 

Whenever someone defends something too they're trying to convince themselves and not others.
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #33 of 230

It's too early to criticize the price when there is no evidence of people not buying them yet.

 

I personally am really interested to see how this product does. At this stage they seem to be dominating the tablet market to the same extent they dominated the music player market. And following the same steps too: take over the high end market, get the reputation as the best, and go after the low-end market only once the "best" reputation is established.

post #34 of 230
Quote:
Originally Posted by AppleInsider View Post
"The iPad is far and away the most successful product in its category," Schiller said. "The most affordable product we've made so far was $399 and people were choosing that over those other devices.
"And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that."

Statement or defence? To say he is defending the price assumes he feels he is being accused. Who is accusing? It seems to me the price fell within expected range and that anyone who has seen the thing agrees it is well priced. So... who is accusing?

post #35 of 230
Quote:
Originally Posted by Rabbit_Coach View Post

Sure enough, there is the price for the components plus some margin on top and voilà there is the market price of the product. And the price is reasonable if you look under the hood. This iPad mini is built to perfection so yeah why and where did he have to defend what seems just right?
That's not at all how consumer goods are priced. It's the cost of goods, which entails a lot of things like R&D, marketing, promotional discounting, indirects (like corporate costs), logistics / transport of goods, etc. And the final pricing is not even based on all of that plus margin. The goal is to optimize price to find the perfect balance of revenue and profit. Underpricing leaves money on the table. Overpricing means lost sales.

My gut reaction is that $329 is too high for that segment, but that's based on where the competition has priced their products and the seeming marketability of those products. However, Apple has surely done some pretty detailed analysis in defining the price points to maximize revenue and profit. And I'm also confident that the Apple product isn't going to be a piece of crap with no resale value.
post #36 of 230
Actually ditch diggers command a high salary because they are running million dollar machines..

The people complaining about the price are analysts and we all know what their motive is and always has been. It has nothing to do with the quality of an item, only its price and what their feeble minds can comprehend. I have an iPhone 5 and its aluminum case feels fantastic, much better than the plastic 3GS it replaced. I gave up buying cut-rate wood working equipment and bought better products even though the price was more because I got tired of the tools breaking and not providing accurate cuts. You get what you pay for an overall, Apple products are built to last. There, take that analysts....
post #37 of 230

It's obvious that the bean-counters are back in charge at Apple. Back in the day, John Scully, John Louis Gassee, and others continually maintained that consumers would gladly pay a premium to own Apple computers. This despite the fact that Microsoft Windows-based PCs had, in many cases, already surpassed the capabilities of Apple's aging Macintosh lineup. And at far cheaper price points.

 

Fast forward to today, where Phil Schiller is publicly defending the iPad mini's $329 price point, saying he believes customers are willing to pay for quality that rivals like Amazon and Google don't offer. "And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that."

 

Is he right? Many analysts -- and consumers -- believe that Apple could have further tromped the competition by hitting a $299 price point. $329, for whatever reason, manages to cross a rather huge line in the sand, perception-wise. The price isn't two-something, it's THREE-something.

 

And it's three-something when other 7" devices by Google and Amazon are selling for $249 and even $199. 

 

One major difference between the Apple of today and Apple of yesteryear is that they still have a rather impressive lead in industrial design and build quality. Previously, one beige box with a mouse running Windows looked pretty much the same as a beige box with a mouse running windows System 7. Unable to tell the difference between the two offerings, consumers and businesses all too often went with the cheaper offering.

 

It's easy to tell the difference in build quality between an exquisitely crafted iPhone and a plastic cased Samsung. Between an iPad mini and an Amazon Fire. But how many will marvel at the fit and finish, then sigh and put it back on the shelf?

 

The sad part is that Apple could well have eaten the extra $30 in exchange for a larger marketshare. They did not.

post #38 of 230
Quote:
Originally Posted by island hermit View Post

Apple is getting too defensive. Just do it and stfu.

 

It just tastes bad.
 

Yep, Apple does not need to defend any of their prices.

 

There are people who appreciate Apple's quality, and then there are people who don't. Luckily for those sorts of people,  bottom of the barrel Android devices are available.

post #39 of 230
I have said it from the start that iOS is the "hotdog" in the Apple menu - the product for the lowest common denominator in our society - but this level of stupidity in marketing really hits the point home.

Yes, for a device that is mostly used for reading - stupid people will think that is is a good idea to trade a smaller, less expensive, sharper resolution screen device (nexus 7) for a more expensive, larger, lower resolution screen.

Yes, stupid people can not wait to rent 3.99 HD movies to see it on a 4:3 1028x768 screen over a 16:9 HD screen.

Yes, stupid people will believe that the new aspect ratio and high resolution on the iphone 5 is great for websites because it gives you sharper text and less need to scroll down yet will believe something else 2 months later.

Remember a time when you walked in to our corporate offices and you understood that when you hit the floor with Macintosh in it you were where some of the smartest and most talented people of the company worked.

Now, it is half baked nonsense held up by marketing stupidity for the 40% of high school students and the population that because everything that they have ever owned someone else made - and everything that has ever inspired them someone else imagined - try so hard to buy some self respect.

Yes, iOS is the dumbing down of Apple.
post #40 of 230
Quote:
Originally Posted by macinthe408 View Post

This is just fine. The same cheapskates whining about the iPad mini's price are the same ones who complain about overpriced BMWs and Porsches, as they spit diatribe out the window of their Ford Pintos.
The world needs ditch diggers, too.

But what the world doesn't need is more arrogance, ignorance and intolerance. And I am not talking about the ditch diggers.

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