Apple's (mostly) wild pricing

posted by Jeff | Tuesday, October 22, 2013, 10:50 PM | comments: 0

Lots of product announcements today from Cupertino, and they're all a little strange. Maybe. I'll get to that.

They've got a new iPad that's the latest hardware, but it's $500 for the base 16 gig model, and that doesn't include any cellular capability. The competition from Amazon and Google offers more storage and/or cellular, and the Amazon tablet even has a higher resolution screen. Granted, the UI on the Kindle totally sucks, but we're talking about Web surfing, Facebook, video and Angry Birds. Frankly the UI doesn't matter that much.

The iPad Mini gets a higher resolution screen now too, starting at $400, but again, it has the same problem with the competition and what they offer for the dollars. I mean, I bought a Kindle Fire HD two months ago for $159, and it has as much storage as the iPad Mini. Again, sucky UI, but is the Mini $240 better? Maybe, but given the Facebook, porn Web surfing and reading use cases, I'm skeptical.

Now, my theory is that maybe they can get away with the pricing, because as they've demonstrated with computers for the last decade or so, they're in no hurry to participate in a race to the bottom for commodity crap. Their goal was never to sell cheap stuff cheap, or sell software on thin margins. They've never had huge marketshare with computers, but if you can sell one and make $300 a pop, while Dell sells one and makes $30, you don't need to sell as many.

So combine that direction with a market that continues to expand, and you can lose market share while selling more units. Android phones collectively crush the numbers for iPhones, but the margins are enormous. If they can do that with tablets, maybe they'll continue to win. I'm just not convinced that the same theory will roll for tablets.

Speaking of computers, I was disappointed that they didn't roll out some kind of "retina" MacBook Air, but the 13" MacBook Pro retina model is very compelling, and unlike the last generation, priced right. I'm definitely thinking about it for next year. My concern is that there are a whole lot of other manufacturers making really nice laptops with even higher resolution (touch) screens. If they can get the track pad right, and cost less, I'll have to think really hard about sticking with the MBA.


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