Be the First on your Block with an iPad and Pay Full Price? (Gasp!)

Monday, February 8, 2010

Screen shot 2010-02-08 at 9.24.48 PM

An analyst with Credit Suisse, Bill Shope, reportedly met with Apple execs this past weekend and was informed that, among other things, Apple intends to “remain nimble” on iPad pricing.

Wow. Big surprise. Isn’t this exactly what they have done with all their other wildly popular products? Case in point: the iPhone. The 8GB was brought out at $599US on June 29,2007 and the price dropped $200US on September 5, 2007 even though they were selling like hotcakes. This was done in conjunction with the dropping of the 4GB handset and only seemed like the right thing to do. Amid howls of unfair pricing from early adopters, Apple CEO Steve Jobs wrote in an open letter to iPhone customers that everyone who purchased an iPhone at the higher price “and who is not receiving a rebate or other consideration”, would receive a US$100 credit to be redeemed towards the purchase of any product sold in Apple’s retail or online stores.

It works like this:
iPad 64gb 3G……$829

AT&T unlimited data plan for the iPad…..$29.99 per month

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Being the first in your group to wow the pants off everyone with your iPad = PRICELESS

Yes, sorry to say, early adopters will pay the price to own their spanky new iPad but that is the whole point for the fanboys and girls (of which I am one, I must disclose at this point). I cannot wait for my iPad. I take it as a given that the price will drop. The time from the moment I lay my hands on it until the price does drop is, in my mind, totally worth it. Any many people I have talked to are on the same wavelength. This device is putting fun back into computers and we are going to be jumping on the bandwagon early, no matter what the cost. After all, it’s only money!

The real news is what else Bill Shope was told, according to Silicon Alley Insider:

Management declined to tip their hand about Verizon.
Instead, they say they’re focused on international expansion. The iPhone is only in 86 countries, while rivals are in 160 countries.
Apple is happy with enterprise adoption of the iPhone, and it thinks that’s a market that will expand.
The movie industry’s legacy deals are screwing Apple from getting the content it wants. For example, HBO has locked out certain titles which Apple can not get. The contracts protecting those locks won’t expire for a few years.
It’s hard to sell a TV show for $1.99 when Redbox is renting a whole movie for $1.00.
On e-books, Apple cares less about the long-tail and more about the hits. It wants the ‘right titles quickly.’
Apple believes the education market presents a massive opportunity for the iPad.
Management doesn’t see the iPad eating at either iPhone sales or notebook sales.
Despite the low price of the iPad, Apple “expects strong profit performance.”
Apple will be nimble with the price of the iPad. If people aren’t buying iPads, Apple could cut the price.
To the critics of the iPad, Apple says ‘bite us.” Okay, not really, but they say most critics haven’t played with one, and they’re focused on what the iPad doesn’t do, rather than what it does.
Apple plans more retail stores around the world.