News Analysis: Some people say that it's time for Apple to cut the price of its iPad 2 tablet to keep it competitive with the Kindle Fire. But that logic is just plain wrong.
that the Amazon Kindle Fire tablet has launched with a price tag of $199
and the Barnes & Noble Nook Tablet retails at $249, many people say that
the time has come for Apple to rethink its tablet strategy and drop the price
of the iPad 2 to bring it more in line with its chief competitors.
argument is that that by doing so, Apple could more effectively fend off the
looming competitive challenge from lower-price competitors,
especially Amazon's Kindle Fire
that argument makes little sense. The fact is, the iPad 2 is already successful
at its $499-and-up price tag and to think that a cut of, say, $100 or $200 would
make a difference is nonsense. Simply put, Apple's iPad 2 is successful at this
more expensive price and it doesn't need a price cut to remain successful. In
other words, a price cut couldn't matter one bit either way.
on to find out why an iPad 2 price cut wouldn't have any impact on the tablet
1. Sales are already strong
$499 and up,
the iPad 2 is already selling exceedingly well at retail
. So, if it's
successful now, what makes anyone think that after dropping the price, and thus
perhaps bringing even more consumers into the tablet market, it wouldn't still
stay on top? Whether or not Apple drops the price of the iPad 2, the tablet
will continue to top the charts.
2. The iPad 2 will still be more expensive
no way Apple can drop the iPad 2's price to $199. Therefore, the device will
still be more expensive than the latest tablets to hit store shelves. That
being the case, nothing would change. Apple would still be offering the premium
product and companies like Amazon and Barnes & Noble would be selling the
3. All others will follow suit
say that Apple does drop the price of its iPad 2 to make its tablet more
attractive to shoppers on a budget. Within days, the vast majority of its
competitors, including Samsung and Barnes & Noble, would cut the price of
their offerings as well. After all, their current pricing seems to indicate
they are comfortable with the price point they have established and they are
likely to move their prices to maintain their price position relative to the
iPad 2 no matter how Apple prices it.
4. Who knows if the Kindle Fire will be a
this talk of Apple being forced to drop the price of the iPad 2 or face trouble
in the tablet market
assumes that the Kindle Fire will be a success
. Given the tablet market's
history, there's no telling if the Kindle Fire can succeed where so many others
have fallen short. Whether or not Apple cuts the iPad 2's price, other tablet
vendors, with the possible exception of Amazon with the Kindle, have yet to
score a mass market success.