Ken Segall on the iPad Mini’s Pricing

Ken Segall:

Reaction to the $329 starting price has been swift and negative. It’s true that in consumers’ minds, $299 is worlds apart from $300. But any Apple analyst who gets upset over this should be ashamed for failing to understand one of Apple’s core philosophies. The company does not compete on price, it competes on quality. Apple does not sell to “everybody” — it sells to those who appreciate a premium product, and who are willing to pay a premium for it.

“Better but costs more” is a gamble. “Better and costs the same or less” is a sure thing. And the iPad is hard to compare to any previous Apple product other than the iPod. The iPod and iPad didn’t enter mature markets — they entered nascent markets with no strong competitors and established themselves as unquestioned market leaders. The iPad Mini’s $329 starting point leaves a price umbrella in tablets that Apple never left for MP3 player competitors.

You can argue the iPod wasn’t targeted at “everybody”, but it was (and remains to this day) targeted at almost everybody. I’m not saying Apple is doing the wrong thing here. I’m just saying it wouldn’t have been unprecedented for Apple to focus more on price.

Wednesday, 24 October 2012