NEWS ANALYSIS: Apple is facing off with a growing number of tablets that come with a $199 price tag. Maybe it’s time the iPad maker follows suit.
Apple is the most dominant tablet
maker in the industry. The company sold more than 15 million iPads during the
fourth quarter, and secured an unbeatable share of the tablet space. All other
companies are left to pick up scraps that, in the coming years, Apple might
just try and grab. To say that the companys iPad is a huge success, at this
point, would be an understatement.
However, Apple is feeling some
pressure from Amazons Kindle Fire. The 7-inch, Android-based tablet cant keep
up with the iPad on power or features, but its $199 price tag is attractive to
consumers. Realizing that, Barnes & Noble recently announced the launch of
the 8GB Nook Tablet for the same $199 price tag. Chances are, in the coming
months, more companies will follow suit and try to severely undercut Apple on
But perhaps the time has come for
Apple to throw a curveball. Rather than allow Amazon and Barnes & Noble to
feed on the bargain end of the tablet market, Apple should deliver its own $199
iPad. It wont be able to match the iPad 3
, of course, but it could put its chief
competitors on their heels. And in the highly lucrative tablet space, doing so
is a very, very good move.
1. Everyone else is doing it
In the tablet space, it seems
just about every company is trying to bring prices down to match the Kindle
Fire. As noted, Barnes & Noble has done it, and other companies are
expected to follow suit this year. If $199 is the new sweet spot for tablet pricing,
Apple should want to be there.
2. Its the unexpected
Apple likes to do things that the market doesnt expect
. Why shouldnt the company do it this
time around with a $199 iPad? For years, Apple has been the provider of an
expensive tablet, despite the market seemingly wanting a cheaper device. Its
about time Apple does something in the tablet space that no one--including
Apples own, loyal fans--expect.
3. It has the iPad 2 ready to go
In the past, Apple has delivered
new iPhones, but kept earlier models on store shelves at reduced prices. Its
doing it right now with the iPhone 3GS and iPhone 4. The company should
consider doing the same with the iPad 2. Its not clear if Apple would be able
to get down to $199 on the iPad 2, but it could get close.
4. It wont hurt iPad 3 sales
Apples iPad 3 is expected to be unveiled in early March
. And when the device is announced, it
could come with a host of major improvements, including a Retina Display and a
quad-core processor. Although a cheaper iPad might, at first glance, seem to
hurt the iPad 3s sales, its highly unlikely thatll happen. A $199 iPad and
the iPad 3 are targeting two very different customers.