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

Posted:
in Current Mac Hardware edited January 2014
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.
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Comments

  • Reply 1 of 101
    Ok. Apple lowered the iPhone's price as well.
  • Reply 2 of 101
    MacProMacPro Posts: 17,513member
    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.
  • Reply 3 of 101
    aka - First adopters, you've been warned, don't complain when the price drops by $100.

  • Reply 4 of 101
    quinneyquinney Posts: 2,512member
    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.
  • Reply 5 of 101
    docno42docno42 Posts: 3,223member
    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...
  • Reply 6 of 101
    "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.
  • Reply 7 of 101
    Quote:
    Originally Posted by Quadra 610 View Post


    Ok. Apple lowered the iPhone's price as well.



    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.
  • Reply 8 of 101
    kolchakkolchak Posts: 1,398member
    If they can "nimbly" drop it to $350, I'm in. An overgrown iPod touch just is not worth $500 to me right now.
  • Reply 9 of 101
    Considering the iPad's (future) capabilities/potential, $499 seems a tad high for only 16GB.
  • Reply 10 of 101
    sandausandau Posts: 1,230member
    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.
  • Reply 11 of 101
    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.
  • Reply 12 of 101
    macroninmacronin Posts: 1,123member
    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
  • Reply 13 of 101
    nebrienebrie Posts: 483member
    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
  • Reply 14 of 101
    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.
  • Reply 15 of 101
    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.
  • Reply 16 of 101
    tenobelltenobell Posts: 7,014member
    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.



  • Reply 17 of 101
    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.
  • Reply 18 of 101
    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.
  • Reply 19 of 101
    cmf2cmf2 Posts: 1,427member
    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.
  • Reply 20 of 101
    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.
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