Its About Time Apple Addresses the Budget-Conscious Customer

By Don Reisinger  |  Posted 2012-02-22 Print this article Print


5. It€™s working with the iPhone

If Apple offered a cheap iPad, it wouldn€™t be unprecedented. The company and its carrier partners are giving away the iPhone 3GS for free, and the iPhone 4 is being sold for just $99. And those devices, along with the full-priced iPhone 4S, are selling exceedingly well. If it works with the iPhone, why wouldn€™t it work with the iPad?

6. Price matters

Like it or not, price matters in today€™s mobile market. The Kindle Fire is successful solely because it comes in at a price that makes consumers care. If the device were $499 like the entry-level iPad, it would fail. Apple has succeeded at the upper echelon of the tablet market, but it€™s about time it succeeds at the budget-conscious level, as well.

7. It doesn€™t devalue the brand

Apple is obsessed with not doing anything that might devalue its brand. In the past, that€™s meant offering products at a significant discount. But since the iPad 3 will be on store shelves at the full price, Apple wouldn€™t devalue its brand by offering a $199 iPad. In fact, it might only improve its brand.

8. Consumers will buy it€”in droves

At the end of the day, companies make decisions that they believe, will increase sales. Given that, and considering the importance of price today, there€™s no reason to suggest consumers won€™t flock to the $199 iPad. Right now, there are many folks that haven€™t been pushed to buy a tablet. An iPad running iOS 5 for just $199 could get them to change their minds.

9. Think of it as a gateway device

The nice thing about bringing more consumers into the iOS game is that they might eventually buy the more expensive iPad 3, Macs or even invest in an iPhone. As history has shown, once Apple gets customers to buy some of its products, they usually want to buy them all. It could apply that same principle to the $199 iPad.

10. Consider the content upside

Selling hardware is obviously central to Apple€™s business, but the company€™s huge profits are due also to its ability to sell content. From apps to music to movies, Apple is offering solutions that it generates all kinds of cash from. Although it might sell the $199 at a loss or at cost, it could quickly make that up with all the revenue it was generating from app and iTunes sales.

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Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Since then, he has written extremely popular columns for, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at

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