iPad Pricing: How Low Can You Go, Apple?
The iPad’s lower-than-expected price may go lower still if the device doesn’t perform as well at market as Apple hopes. Recounting his recent meeting with some executives from the company in a research note issued last night, Credit Suisse analyst Bill Shope said Apple is evidently quite willing to get even more aggressive with the iPad’s $499 to $829 pricing.
“While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),” Shope wrote.
Now, it’s a truism that most companies are open to price cuts on any product if they need to increase sales. That said, this is an interesting disclosure coming from Apple (AAPL) execs, particularly so far in advance of the iPad’s actual debut. Certainly, it calls to mind the company’s decision to slash the price of the iPhone by $200 two months after it went on sale and the early-adopter rebate it was forced to issue afterward. It seems odd, then, that Apple execs would even hint at the possibility of an early price cut lest they give folks already on the fence about buying the first iteration of the device more reason to stay there.
Unless they’re planning a prerelease price cut to really juice sales. Remember, Apple reportedly stands to make about a 42.9 percent margin on the iPad, so there’s presumably plenty of room for the company to hit an even more aggressive price point that would really put the device in the netbook range.