[LIST=1][*]Is Apple able to produce so many iPads compared to what they can sell that dropping the price by $200 reasonable to make more money?[*]Are those clamoring for a $300 iPad doing so becuase it's just above the Nook Color and Kindle Fire? Let me remind you they have 40% of the display area and are vastly limited compared to any iPad.
I agree entirely. But people are buying $200 7" tablets, thinking they're getting the iPad experience. They are of course very wrong, and haven't used an iPad enough to know any better. But the Kindle Fire shows that this will be a growing problem for Apple. Park a 9.7" iPad model permanently at a sub-$350 pricepoint and I think Apple would see those 7" bottom-feeders die off.
Quote:
Originally Posted by SolipsismX
[*]What does a $300 iPad bring to Apple that they aren't already getting with a $500 iPad.
It'd bring Apple the customers who are settling for crappy 7" tablets. More importantly, it'd maintain their market share.
Doesn't offering a $300 tablet go against the $100 stepping rule Apple uses and locks out a chance for a 5-8" iPod Touch that can fit within that $200 3.5" iPod Touch and $500 iPad?
Hey, I'm all for locking out a 5-8" device, but I still don't think we'll see a $299 iPad.
Apple is currently selling their refurbished 16GB iPad2 for $419. Can't see them selling it new for $299, even if it's last years model. But it would be sweet!
I suspect $349 is as low as they might go. But if they follow trend from the iPhone they would only be selling the 16 GB wifi only, not all of them. And given that folks were more than willing to spend $499 and up, how many sales would there be for a 32 GB wifi iPad 3 versus that iPad 2, depending on the changes to the line. I bet not that many
There's a danger in dropping the current iPad 2 to $299 and putting the better Retina iPad 3 at $499...
---> More people would just get the $299 model instead of the $499 model.
Or not. the 3gs is still on sale (for free even) but we haven't see the 4s suffer in sales. And if the prices of the SSD have gone down to a point that they can up the capacity for the iPad 3 and keep the same margins then it's possible that a $299 iPad 2 wouldn't lose money. It might only break even but that could be fine, especially since its unlikely that that many folks would buy it compared to the new one. Especially iPad 1 users that are upgrading. They will likely all go for the iPad 3. Some schools, a few business etc might go for the iPad 2 but most of those will probably be newcomers and thus its still good to get them in the family even if there's little profit right now.
I agree. Just recently, we saw the cost of components and manufacturing for the iPad 2. It was around $281 or something wasn't it?
That information was never confirmed by Apple as correct. Plus for all we know the prices are about to go down.
Quote:
So this analyst figures Apple will make $8 on each one and pay their sales team too?
THey still have the 'apple tax' from the iPad 3, the computers etc. IF they continue selling the iPad 2 it will only be the base line model so that it doesn't conflict with the iPad 3 line up. How many folks are likely to buy that base line even at $299 when for $200 more they could get more capacity, a better camera, a way better screen, siri and so on. Like I said to Michael, perhaps some schools for the kiddies and maybe a few businesses that are using them in house (like restaurants or maybe airlines to rent during flights) but really probably not that many anymore than having a 'free' 3gs has hurt 4s sales
And if the prices of the SSD have gone down to a point that they can up the capacity for the iPad 3 and keep the same margins then it's possible that a $299 iPad 2 wouldn't lose money.
I posted in another thread the other day that the 128GB NAND SSD are finally being produced as of early December, but those were test runs and it was expected first half of 2012 would be when they would start seeing actual production. Depending on how early in the year they get it, we might see 128 in an iPad 3.
Quote:
Originally Posted by charlituna
Especially iPad 1 users that are upgrading. They will likely all go for the iPad 3.
My wife and I have an original iPad. We're both buying a 3 and I know that, for me at least, I'd rather get the newer model than save $100 and wish I had the new model.
Apple thinks strategically and plans the whole product cycle over several years...
This puts Apple in a different position than the copy/catch-up competitors.
When Apple introduced the iPad 1, 2 years ago, it set an aggressive price point for the low-end model. This was less-profitable than the other models -- but it contributed to the iPod's market dominance and economies of scale.
AFAICT, Apple does not release profit per model or even evaluate it that way -- other than to set pricing. Rather, Apple's goal is profit for the iPad family -- realizing some models will be more profitable than others.
Also, some costs like the CPU/GPU SoC PoP, Cameras, SSD, etc. can be amortized across several product lines.
OK, here we are, 2 years later! Apple's combination of aggressive pricing and product capabilities, likely, have met Apple's expectations.
Time to consider the next phase of the strategy...
What combination of price/models/capability/profit/economies of scale will meet Apple's goals for the next 2-3 years.
I suspect, the A6, Retina Display, 128 GB SSD, better cameras, Siri... are where the sweet spot of the market will be in 2.5 years.
What iPad lineup gets Apple to where they want to be?
If Apple can profitably sell a low-end $299 iPad for the next 2 years, that contributes to this goal -- do it!
If Apple can profitably sell a high-end $699 iPad for the next 2 years, that contributes to this goal -- do it!
Edit: Somewhere in all this pile of shit (models and prices) there's are 2 ponies -- the iPad remote and the Personal TV...
...So, better questions might be what comprises a $99 iPad Remote and a $149 iPad Personal TV?
1. When the iPad 2 was released, Apple and its resellers were clearing out original iPads at $349 - that means after 12 months of being on the market they could cut the price by $150 and still turn a profit.
You don't know that they were still turning a profit. perhaps they weren't.
Quote:
2. We know from iSuppli teardown's
Which was nothing more than a best guess not fact. Apple was buying in huge bulk so perhaps the prices they guessed were far off the mark.
Quote:
3. At this juncture, it's almost a given that the iPad 3 will pack a Quad-core A6 and Retina display -
If by a given you mean "I really really hope" then yes. Otherwise nothing is a given until Apple makes the announcement. No matter how many insider sources someone claims to have
So basically you are deducing based on rumor and unconfirmed information, not fact. Making your deductions just as much of a rumor
With iCloud I don't think 8 GB is insane - though I doubt they would go backwards.
They could go for a low cost 8g ipad2 if they add micro-sd for future mem upgrade. Would be a way to compete at the low end market. I would not buy a lock down 8g tablet. They should add SD to there lower end previous year phone with low memory too.
I regret having to call B.S. on this "rumor" because if it's true the secondary market (eg, Craigslist, eBay) is going to tank the currently inflated price of ~$375 for those perfectly functional iPad 1's down to a hundred bucks, and I can afford to put one in every room. #WINNING.
For anyone curious about the $369 bill referenced a few time in this thread, the source is here under "My iPad is not eligible for warranty service. What are my service options?"
[...] The prospect of a new entry-level model has been seen by analysts as a way for Apple to counter the Kindle Fire, which Amazon is believed to be selling for a loss in order to push digital content to users.
Amazon (and all other Android pad makers) fear a $299 iPad 2 in 2012.
But it could get worse for the Android wannabes. Apple could do what they did with the iPhone 3GS. They could keep the low-end iPad 2 model around through 2013 at $199. Apple will still be able to clear 30% margins at the $199 price point because they'll be able to amortize the iPad 2 development costs and manufacturing equipment expenditures over 3 years of sales. Try that with the Kindle Fire, Amazon.
Comments
[LIST=1][*]Is Apple able to produce so many iPads compared to what they can sell that dropping the price by $200 reasonable to make more money?[*]Are those clamoring for a $300 iPad doing so becuase it's just above the Nook Color and Kindle Fire? Let me remind you they have 40% of the display area and are vastly limited compared to any iPad.
I agree entirely. But people are buying $200 7" tablets, thinking they're getting the iPad experience. They are of course very wrong, and haven't used an iPad enough to know any better. But the Kindle Fire shows that this will be a growing problem for Apple. Park a 9.7" iPad model permanently at a sub-$350 pricepoint and I think Apple would see those 7" bottom-feeders die off.
[*]What does a $300 iPad bring to Apple that they aren't already getting with a $500 iPad.
It'd bring Apple the customers who are settling for crappy 7" tablets. More importantly, it'd maintain their market share.
Doesn't offering a $300 tablet go against the $100 stepping rule Apple uses and locks out a chance for a 5-8" iPod Touch that can fit within that $200 3.5" iPod Touch and $500 iPad?
Hey, I'm all for locking out a 5-8" device, but I still don't think we'll see a $299 iPad.
I think if they drop the price and also throw in a free pony, they will own the market...
That's just silly.
It'll be a horse. You'd have to file your saddle down with sandpaper to use a pony.
That's just silly.
It'll be a horse. You'd have to file your saddle down with sandpaper to use a pony.
And it would squeeze your nuts
Apple is currently selling their refurbished 16GB iPad2 for $419. Can't see them selling it new for $299, even if it's last years model. But it would be sweet!
I suspect $349 is as low as they might go. But if they follow trend from the iPhone they would only be selling the 16 GB wifi only, not all of them. And given that folks were more than willing to spend $499 and up, how many sales would there be for a 32 GB wifi iPad 3 versus that iPad 2, depending on the changes to the line. I bet not that many
There's a danger in dropping the current iPad 2 to $299 and putting the better Retina iPad 3 at $499...
---> More people would just get the $299 model instead of the $499 model.
Or not. the 3gs is still on sale (for free even) but we haven't see the 4s suffer in sales. And if the prices of the SSD have gone down to a point that they can up the capacity for the iPad 3 and keep the same margins then it's possible that a $299 iPad 2 wouldn't lose money. It might only break even but that could be fine, especially since its unlikely that that many folks would buy it compared to the new one. Especially iPad 1 users that are upgrading. They will likely all go for the iPad 3. Some schools, a few business etc might go for the iPad 2 but most of those will probably be newcomers and thus its still good to get them in the family even if there's little profit right now.
I agree. Just recently, we saw the cost of components and manufacturing for the iPad 2. It was around $281 or something wasn't it?
That information was never confirmed by Apple as correct. Plus for all we know the prices are about to go down.
So this analyst figures Apple will make $8 on each one and pay their sales team too?
THey still have the 'apple tax' from the iPad 3, the computers etc. IF they continue selling the iPad 2 it will only be the base line model so that it doesn't conflict with the iPad 3 line up. How many folks are likely to buy that base line even at $299 when for $200 more they could get more capacity, a better camera, a way better screen, siri and so on. Like I said to Michael, perhaps some schools for the kiddies and maybe a few businesses that are using them in house (like restaurants or maybe airlines to rent during flights) but really probably not that many anymore than having a 'free' 3gs has hurt 4s sales
And if the prices of the SSD have gone down to a point that they can up the capacity for the iPad 3 and keep the same margins then it's possible that a $299 iPad 2 wouldn't lose money.
I posted in another thread the other day that the 128GB NAND SSD are finally being produced as of early December, but those were test runs and it was expected first half of 2012 would be when they would start seeing actual production. Depending on how early in the year they get it, we might see 128 in an iPad 3.
Especially iPad 1 users that are upgrading. They will likely all go for the iPad 3.
My wife and I have an original iPad. We're both buying a 3 and I know that, for me at least, I'd rather get the newer model than save $100 and wish I had the new model.
Here is some very interesting info (IMHO) this peace of receipt from apple for iPad23g
I can make up one of those too. It's really easy.
This puts Apple in a different position than the copy/catch-up competitors.
When Apple introduced the iPad 1, 2 years ago, it set an aggressive price point for the low-end model. This was less-profitable than the other models -- but it contributed to the iPod's market dominance and economies of scale.
AFAICT, Apple does not release profit per model or even evaluate it that way -- other than to set pricing. Rather, Apple's goal is profit for the iPad family -- realizing some models will be more profitable than others.
Also, some costs like the CPU/GPU SoC PoP, Cameras, SSD, etc. can be amortized across several product lines.
OK, here we are, 2 years later! Apple's combination of aggressive pricing and product capabilities, likely, have met Apple's expectations.
Time to consider the next phase of the strategy...
What combination of price/models/capability/profit/economies of scale will meet Apple's goals for the next 2-3 years.
I suspect, the A6, Retina Display, 128 GB SSD, better cameras, Siri... are where the sweet spot of the market will be in 2.5 years.
What iPad lineup gets Apple to where they want to be?
If Apple can profitably sell a low-end $299 iPad for the next 2 years, that contributes to this goal -- do it!
If Apple can profitably sell a high-end $699 iPad for the next 2 years, that contributes to this goal -- do it!
Edit: Somewhere in all this pile of shit (models and prices) there's are 2 ponies -- the iPad remote and the Personal TV...
...So, better questions might be what comprises a $99 iPad Remote and a $149 iPad Personal TV?
1. When the iPad 2 was released, Apple and its resellers were clearing out original iPads at $349 - that means after 12 months of being on the market they could cut the price by $150 and still turn a profit.
You don't know that they were still turning a profit. perhaps they weren't.
2. We know from iSuppli teardown's
Which was nothing more than a best guess not fact. Apple was buying in huge bulk so perhaps the prices they guessed were far off the mark.
3. At this juncture, it's almost a given that the iPad 3 will pack a Quad-core A6 and Retina display -
If by a given you mean "I really really hope" then yes. Otherwise nothing is a given until Apple makes the announcement. No matter how many insider sources someone claims to have
So basically you are deducing based on rumor and unconfirmed information, not fact. Making your deductions just as much of a rumor
I can make up one of those too. It's really easy.
It wasn't made up. It's the out-of-warranty service fee for that model iPad.
With iCloud I don't think 8 GB is insane - though I doubt they would go backwards.
They could go for a low cost 8g ipad2 if they add micro-sd for future mem upgrade. Would be a way to compete at the low end market. I would not buy a lock down 8g tablet. They should add SD to there lower end previous year phone with low memory too.
Here is some very interesting info (IMHO) this peace of receipt from apple for iPad23g
Replacement unit price. My 32g wifi ipad2 price was 309$. It was cover by the warranty but that was the price on the bill.
https://picasaweb.google.com/lh/phot...Fm0?feat=email
Could be a indication of ipad2 cost indeed. So if this is cost they would still turn out a profit with a 8g ipad2 at 299.
http://support.apple.com/kb/index?pa...s&product=ipad
[...] The prospect of a new entry-level model has been seen by analysts as a way for Apple to counter the Kindle Fire, which Amazon is believed to be selling for a loss in order to push digital content to users.
Amazon (and all other Android pad makers) fear a $299 iPad 2 in 2012.
But it could get worse for the Android wannabes. Apple could do what they did with the iPhone 3GS. They could keep the low-end iPad 2 model around through 2013 at $199. Apple will still be able to clear 30% margins at the $199 price point because they'll be able to amortize the iPad 2 development costs and manufacturing equipment expenditures over 3 years of sales. Try that with the Kindle Fire, Amazon.