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What will they do for the iPad? Well, we have already seen Apple apply the methodology of keeping old hardware on the market - they sell the iPad 2 at $399. But, this isn't really eliminating the pricing umbrella, it just lowers it. In order to eliminate the pricing umbrella Apple needs to serve the $199 to $399 price range. ($199 is the bottom of the market until new technologies emerge, new price models emerge, or a company decides to sell the hardware at a loss to gain market share.)
Let's see all this visualized. This is every current model of iPhone, iPod, and iPad graphed by price.
Looking at the red iPhone price points, notice that most of the lower prices are served by iPhone's that say "Locked". These are subsidized by $400 by the carriers. And at the lowest price point ($0) is the older iPhone 3GS, which benefits from being subsidized and from being older cheaper hardware.
Looking at the blue iPod price points, notice that the price points are clearly served by different product lines. iPod Touch at the high end, iPod Nano in the middle, and iPod Shuffle at the bottom. Just like we said, they used product lines here to eliminate any umbrella.
Looking at the green iPad price points, we can see the the iPad 2 served to push down the umbrella from $499 to $399. However, there is an obvious umbrella and it's clear that Apple needs a product to cover the $199 to $399 price range. Insert the iPad Mini here.
They've already used the older hardware strategy, so the remaining two strategies are 1) get subsidies or 2) create a new product line.
Let's see all this visualized. This is every current model of iPhone, iPod, and iPad graphed by price.
Looking at the red iPhone price points, notice that most of the lower prices are served by iPhone's that say "Locked". These are subsidized by $400 by the carriers. And at the lowest price point ($0) is the older iPhone 3GS, which benefits from being subsidized and from being older cheaper hardware.
Looking at the blue iPod price points, notice that the price points are clearly served by different product lines. iPod Touch at the high end, iPod Nano in the middle, and iPod Shuffle at the bottom. Just like we said, they used product lines here to eliminate any umbrella.
Looking at the green iPad price points, we can see the the iPad 2 served to push down the umbrella from $499 to $399. However, there is an obvious umbrella and it's clear that Apple needs a product to cover the $199 to $399 price range. Insert the iPad Mini here.
They've already used the older hardware strategy, so the remaining two strategies are 1) get subsidies or 2) create a new product line.
http://www.iamconcise.com/main/the-reason-for-the-ipad-mini.html
Thought this was a very interesting article. Leaves me convinced there will be an iPad mini now.
