Newsletter Issue #573: Does Anyone Not Sell the iPad?

November 22nd, 2010

Yes, we all know that an iPad version 2.0 will be out early next year, probably in February or March. With the onslaught of supposed iPad killers from Samsung, HP, RIM and other companies, this comes as no surprise. Despite having trouble keeping up with demand, Apple moved the iPad into the top slot among all existing tablet-based computers, with 95% of the market.

This almost leads you to wonder if the iPad will remain as dominant in its market as the iPod, for similar reasons. The competition will try to trump Apple with extra features, but they won’t be able to topple the iPad so easily. The fact that the highly-touted Samsung Galaxy Tab can barely match the iPad’s price, even though it incorporates a much cheaper 7-inch display, clearly indicates that Apple has the pricing issues down pat.

Now that they are building loads of them, perhaps economies of scale will even make it possible to drop the price. When industry analyst Stephen Baker, of the NPD Group, suggested that a $499 entry-level price isn’t quite “mass market” when he appeared on The Tech Night Owl LIVE this weekend, I suppose he was largely correct. But if tens of millions of people pay more than that for even a fairly basic personal computer, you have to wonder.

The original iPod, which blew the digital music player market wide open beginning in 2001, started at $399. Yes, it was considered overpriced then, but customers didn’t seem to notice; today’s cheapest iPod is $49. The iPad’s pricing, on the other hand, is supremely aggressive, and this is confirmed by the inability of competitors to match it.

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