If sales of the iPad tablet are not up to estimates, Apple could quickly reduce the price. Could this be a hint of a tablet war in the making?
By announcing that their iPad tactile PC product lines will range between 500 dollars and 830 dollars, Apple has perhaps caught their competition off guard, as initial estimates of 1000 dollars were seen to be easy to under cut.
The iPad’s characteristics, its processor and even look come across as nothing other then a large iPod Touch (same OS, and even the same mobile applications from the App Store), with potential entertainment options even being similar.
Due to this, certain market watchers have raised the possibility that the market may be cannibalized when compared to other Apple products. The question would have to be asked as to why you would purchase an iPad when the iPhone and iPod Touch do almost the same thing, with the only notable difference being the screen size.
Apple ready to quickly adjust their economical modelIt seems that Apple may be ready to get into a pricing war if the tablet PC doesn’t have quick success. This is at least what Marketbear is suggesting, one of the Wall Street Journal’s blogs, which quotes a note by Credit Suisse analyst Bill Shope.
The point of view was developed after meeting Apple executives, with their statement being well developed as to the risk of market cannibalisation:
"Apple wants the iPad to be the best device for a few key use cases. For instance, the company believes it could eventually be seen as superior to both handheld and notebook devices for browsing the Internet, using the App Store, and consuming mobile media (video, photos, and e-books). Nevertheless, in other areas, notebooks, the iPhone, or an iPod may be more appropriate. This clear segmentation of capabilities suggests that cannibalization may be less of a concern than most currently believe", notes Bill Shope.
If the devices sales don’t live up to expectations, Apple is looking to be nimble on the previous iPad’s pricing released on the 27th of January, with possible reductions to be quickly implemented. The company seems to have developed their strategy with their aim being to quickly take market share, and then hold onto it.
A price reduction may be possible as Apple has already worked a comfortable profit margin into their prices according to current manufacturing estimates. From a consumer point of view, this could also mean that those who purchase the device quickly may see significant price reductions just a few weeks after acquiring the device…