Apple to Remain 'Nimble' on iPad Pricing
Apple could cut iPad prices if the device isn't selling well, the Wall Street Journal reports.
According to Credit Suisse analyst Bill Shope, who met with Apple executives Sunday night, Apple indicated that it would slash iPad prices if the device didn't sell enough units. "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)," Shope wrote in a post-meeting note.
The iPad is already priced aggressively, at just $499 for the starting model (16GB, no 3G) — much less than initially expected. Apple is perhaps bolstering itself against the potentially lackluster iPad market — since the announcement of Apple's wonder-tablet, the iPad has been under constant fire with regard to its name, its lack of a camera and multitasking, and the argument that the iPad is just a giant iPod touch.
Online consumer marketplace Retrevo reports that the number of people who have heard about the tablet but are uninterested in buying one, has doubled from 26 percent (before the tablet's unveiling) to 52 percent.
The flexibility in pricing is reminiscent of the iPhone's release in 2007 — when Apple slashed the price of the iPhone by $200 just two months after the phone's debut.
Also in Shope's post-meeting note: Despite what some believe, Apple officials don't think that the iPad is in danger of "cannibalizing" other Apple lines. According to the execs, there is a clear "segmentation of capabilities" that suggests "cannibalization may be less of a concern than most currently believe."
By remaining flexible on pricing, it might seem as though Apple is prematurely predicting a failure of sorts in its iPad. Of course, we must remember that the iPad is a tablet in a (mostly) tablet-less world. Apple has a history of changing the world with its technologies (think about the MP3 market before the iPod), and perhaps erring on the cautious side is the way Apple does it.