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

24

Comments

  • Reply 21 of 77
    tundraboytundraboy Posts: 1,597member

    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.

  • Reply 22 of 77
    DaekwanDaekwan Posts: 174member


    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.

  • Reply 23 of 77
    gazoobeegazoobee Posts: 3,754member

    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.  

  • Reply 24 of 77
    tundraboytundraboy Posts: 1,597member

    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?

  • Reply 25 of 77
    gazoobeegazoobee Posts: 3,754member

    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. 

  • Reply 26 of 77
    allenbfallenbf Posts: 993member

    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.  

  • Reply 27 of 77
    tundraboytundraboy Posts: 1,597member


    mispost

  • Reply 28 of 77

    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.

  • Reply 29 of 77
    gazoobeegazoobee Posts: 3,754member

    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. 

  • Reply 30 of 77


    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!

  • Reply 31 of 77
    gazoobeegazoobee Posts: 3,754member

    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. 

  • Reply 32 of 77
    tundraboytundraboy Posts: 1,597member

    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.

  • Reply 33 of 77
    gwlaw99gwlaw99 Posts: 134member


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

  • Reply 34 of 77
    tundraboytundraboy Posts: 1,597member

    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".

  • Reply 35 of 77
    gazoobeegazoobee Posts: 3,754member

    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. 

  • Reply 36 of 77

    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?

  • Reply 37 of 77

    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...

  • Reply 38 of 77

    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.

  • Reply 39 of 77
    gatorguygatorguy Posts: 19,805member

    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.

  • Reply 40 of 77
    stefstef Posts: 87member
    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.
Sign In or Register to comment.