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Now 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.
The 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.
But 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.
Read on to find out why an iPad 2 price cut wouldn’t have any impact on the tablet market.
1. Sales are already strong
At $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
There’s 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 cheaper options.
3. All others will follow suit
Let’s 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 success?
All this talk of Apple being forced to drop the price of the iPad 2 or face trouble in the tablet marketassumes 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.
iPad 3 Is Lurking
5. Android has yet to prove itself
It’s important to remember that Android has yet to prove itself as a successful tablet operating system. Until it does, nothing in the marketplace is going to change, no matter what the price range for tablets. So far consumers just don’t like Android on tablets, and that’s something everyone must keep in mind.
6. Apple’s branding is too mighty
Even if the iPad 2 were on sale for $1,000, the device would be a blockbuster hit. The reason for that is simple: It’s designed by Apple. For years, Apple has been viewed as the top hardware maker in the business, and consumers are willing to pay any price to get its products. That is no different with the iPad 2.
7. The other devices aren’t changing
It’s also important to examine the current collection of tablets on store shelves. There are many tablets that on paper at least look rather compelling, but in reality fall short. The RIM BlackBerry PlayBook, for example, comes with a small, 7-inch display and lacks native email and messaging applications. The Kindle Fire has just 8GB of onboard storage and no cameras. Simply put, price is the least of the worries of many tablet vendors right now, and that’s keeping the iPad 2 atop the market, regardless of its price.
8. An iPad 3 is lurking
Even if Apple decides to drop the price of the iPad 2, the company is probably preparing to launch the iPad 3 within months. In other words, Apple might just drop the price of the iPad 2 to make room for the more expensive iPad 3. In the process,Apple will do nothing to change the status quo of the tablet market.
9. The enterprise is willing to pay the price
Although enterprises haven’t always been so willing to deploy the iPad, it’s increasingly warming to the idea. Most importantly to Apple, companies are more than willing to pay whatever price the iPad 2 goes for. So, don’t expect things to change when it comes to tablet enterprise adoption. Companies have already voted with their wallets.
10. It’s not about the price, anyway
Hopefully all these points have helped you come to one very important conclusion: When it’s all said and done, tablet adoption by both consumers and enterprise users has little to do with price. Overall, they are fairly powerful computers that cost relatively little. As a result, tablets are successful because of their features, their brand and their marketing appeal. Price doesn’t matter nearly as much as some think.