$329 - why it works

[mkruck]

Looks the like the BMW driver stereotype is leaking off into the Apple world. Good God.

It started when the iPhone really gained traction - when it was the latest must have for your Mom and/or Dad. When a product gets to the point that your mother is using it, it's reached mass penetration.

On a side note, I have noticed that all the BMW drivers that post on MR all drive the 3 Series, which makes me laugh every time one of them references what a great piece of machinery their car is.

 

[jedolley]

You realize Barnes and Noble- a book seller- is releasing a tablet next week with far better specs- better screen, more Ram, storage card- for a much cheaper cost? And it's a true 7 inch.

Apple can't do better than a book seller?

Apple is nuts with this silly mini ipad.
Good luck.

The B&N tablet may end up with SOME better components, but the end result will probably be a worse user experience. The abomination Nook calls an OS is the WORST custom android I have ever seen. Anything you have to root just to get a decent experience, already failed from the start IMO.

Haven't we learned by now that a great tablet is not the sum of it's components, but the actual user experience? There are some decent 7" Android tablets out there (Nexus 7, Fire HD for example), but Android still is not there in terms of App market, especially tablet apps.

 

[thedarkhorse]

I can tell you why it works in 4 words. It's the cheapest ipad.

The bulk of people in the market for an ipad don't care about all the potential options for android tablets, they want an ipad.

 

[mantan]

Right, the same folks who buy Brand X HD TVs at Walmart for $400 rather than a comparable Sony (or whatever your favorite brand of TV is) will get a less expensive tablet device; I understand this may be all they can afford, I'm not trying to be an elitist.

Yeah...you're not trying to be elitist.

I always love how it's one extreme or another. A brand X TV at Walmart....or a Sony. Or the comparison people use in other threads...a Kia or a Mercedes.

Like with other things, I'd like to see a quality product at a reasonable price....some middle ground.

 

[Bokes]

You realize that Barnes and Nobles brings out a reader at cost or close to cost and makes their money on selling the content. Apple's business model is different.

And isn't that the purpose of owning a tablet device?
You realize it's useless without content?
Less money spent on device = more $$ for content!
Another point for a cheaper, better 7 incher.

 

[AlaskaMoose]

It always goes back to the lame straw man argument that Apple can't sell things at cost.

Of course not, nor should they since that's their business model. But this thing is making a huge margin, make no mistake about it. It would have made a very nice margin at $299 with about 10% of the complaints...but they just had to squeeze that extra $30 out.

So much so that they are now floating stories out there about low yield on parts being the culprit for higher prices. (Ignore the fact that even if they got all the screens they needed at the price they wanted in 30 days they wouldn't lower the price.

As a consumer I would have liked to see it at $299. An amount that would have ensured a healthy profit, but would have been under the $300 mark. (I also would like to see Apple stop squeezing an extra $100 for a $8 dollar memory bump to 32 gig....but that's just dreaming.)

As much as I love their products, I hate Apple as a company. They will methodically squeeze every penny out of you that you can (like that overpriced Lightning adapter)....yet play this charade that they are just a hip cool company making things you love. But their stuff is good, and I end up buying it. But I get no more joy giving them my money than filling my tank with gas or paying my insurance premium. But with Apple it's entertainment income...so I can't blame anyone but myself.

They are no different than Exxon, GE, Pfizer, HP, GM or any other big corporation. Their ONLY driving interest is maximizing revenue....yet they still get people to write long heartfelt posts defending their actions.

Agree with you.

I will also add the following to what you have written:

a. Instead of $329.00, why not $249.00 as a starting point for bare-bones iPad Mini?

b. The state of the US economy is not the best at the moment, and Christmas is coming. A lot of people, including parents who want to buy more than one tablet, would be pressed not to look at other brands for bargains.

When I heard the rumors about an iPad Mini I was certain I would buy one, until its price was announced this week. An iPad 2 costs $399.00, and some retailers often offer discounts as the Holidays near, so I won't be buying an iPad Mini anytime soon.

 

[pruhawk]

The price point would be fine if Apple had just made the base unit with 32GB of memory. Cost to Apple - $6.40. The 32GB Mini even for an additional $80 is great competition for the 32 GB Kindle Fire or 32 GB Nexus 7, which both cost about $250.

But at 16 GB (on a media device????) and a A5 and no retina display - hard to get excited about this generation.

As Cub fans have been know to say this time of year - "There is always next year."

 

[pear21]

Everybody keeps saying they expected it to be $300 so the $30 bump isn't much. Apple could have sold it for $275 and kept the apple prestige.

 

[smellysox8]

http://www.youtube.com/watch?v=iJtS8201qNc&feature=plcp

 

[Andrew K.]

Seriously, if other companies didn't come out with at-cost tablets no one would be complaining abou the mini's price point. Whether you agree or not Apple sets out to make products of the highest quality. I hate that people thought apple would abandon one of their core values as a brand to undercut the market.

 

[zhenya]

On a side note, I have noticed that all the BMW drivers that post on MR all drive the 3 Series, which makes me laugh every time one of them references what a great piece of machinery their car is.

Why? It isn't by accident that the 3-series has been considered the benchmark for C-class vehicles for over 20 years, and is the standard by which every other car in the class is measured against. So what's so funny?

And no, I don't drive a BMW. Care to divulge the great piece of machinery you drive?

 

[gnasher729]

"At $329, it is believed that Apple will duplicate the 58% to 103% gross profit margin it enjoys on the third-generation Apple iPad." - Phone Arena.


Oh yeah, it works, all right.

In order to have 103% gross profit margin, Apple would have to convince Foxconn to pay Apple $9.87 for each iPad Mini they produce, plus all the sales cost (shipping, store cost, warranty cost etc. ). Not likely.

 

[Anonymouslives]

It works because the iPod touch is overpriced at $299. It should be $199 and the mini should start at $249

 

[ZBoater]

It works because of something called supply and demand.

Apple will sell out of these things. At $349 or at $299. So why leave millions of $$$$ of profit on the table? That's crazy.

 

[AlaskaMoose]

Everybody keeps saying they expected it to be $300 so the $30 bump isn't much. Apple could have sold it for $275 and kept the apple prestige.

Most people expected it to be around $250.00 in order to take a portion of the market share os existing tablets. At least according to all the news reports prior to its introduction to the market. The iPad Mini does not even have a Retina Display, and it costs nearly the same as an iPad 2.

Is it possible that Apple decided not to take too much market share from the more expensive iPad 2, or maybe some of the iPod models?

Regardless, the price of the iPad Mini is not what the market expected.

 

[mkruck]

Why? It isn't by accident that the 3-series has been considered the benchmark for C-class vehicles for over 20 years, and is the standard by which every other car in the class is measured against. So what's so funny?

And no, I don't drive a BMW. Care to divulge the great piece of machinery you drive?

I drive a Mercedes CL. You know, the one that's considered the benchmark for luxury coupes?

 

[cdmoore74]

You guys sound so pathetic trying to justify such a high cost. People; it's a iPad 2 packaged into a smaller package. That's it. Nothing special. Exactly why the black model is still available for pre-order right now. The white one sold out because of the delicate paint job on the black unit and lack of stock.

 

[mantan]

It works because of something called supply and demand.

Apple will sell out of these things. At $349 or at $299. So why leave millions of $$$$ of profit on the table? That's crazy.

You're right, it is a supply and demand issue. If enough people managed to hold their wad at the $329 price and sales were softer than expected, there could be downward pressure on Apple to lower the price.

The fact they were compelled to speak out on the pricing means it's on their radar.

At $299 I would have preordered two today. At $329, I'm going to wait and see what Google introduces on Monday.

The absolute best thing for consumers is for Google and Samsung to continue to refine their products and create some true competition to soften up demand even more.

 

[Angus9541]

If you work on filling you ipad mini with jailbeak software and ripped off music and video the 329 price tag seems minuscule!

Im in the process of migrating to france, taking alot of books, vinyl, cds, dvds, magazines to the bin and charity shop. If I want it ill get it back from the pirate bay cloud and enjoy it on my iPad mini or laptop.

 

[ZBoater]

You guys sound so pathetic trying to justify such a high cost. People; it's a iPad 2 packaged into a smaller package. That's it. Nothing special. Exactly why the black model is still available for pre-order right now. The white one sold out because of the delicate paint job on the black unit and lack of stock.

Sir Johnny said that's not true. He said it was not a reduction, but a concentration. I believe him...

 

[aka777]

Apple priced the Mini at $329 because they know that people will buy it regardless because "It's an iPad". The same argument is made by the same people who buy BMW's "Because it's a BMW". They don't care about quality or reliability, they want the image. We're an image obsessed society, that's why people like Apple products and expensive cars. They're trying to impress.

Not true at all. In reality, it's folks who buy truuuuks, yet have never carried a piece of lumber that are driven by ideology.

Most people who buy a BMW, Merc, Audi are looking and appreciate quality. Same deal with Mac products, I was last to like Apple but their quality and their Customer service is second to none.

Speaking of vehicles, Trucks are the biggest joke on the planet and who typically buys them, middle Americans who have little notion of quality or safety.

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You guys sound so pathetic trying to justify such a high cost. People; it's a iPad 2 packaged into a smaller package. That's it. Nothing special. Exactly why the black model is still available for pre-order right now. The white one sold out because of the delicate paint job on the black unit and lack of stock.

No brainer, it's the same reason the white SGIII has sold well, the white is more preferable.

In terms if the larger iPad, I gave the white back, as movies just didn't look good with a white border.

 

[RedRaven571]

Yeah...you're not trying to be elitist.

I always love how it's one extreme or another. A brand X TV at Walmart....or a Sony. Or the comparison people use in other threads...a Kia or a Mercedes.

Like with other things, I'd like to see a quality product at a reasonable price....some middle ground.

Sometimes all you can afford is the Kia, right?

my solution was a used iPad 2 64 gb 3G that I bought on eBay from somebody unloading it to get the 3 when it was released. No elitist here, but it'd rather have a slightly used quality item than the entry level latet greatest, or the best kindle fire hd.

 

[rockyroad55]

It started when the iPhone really gained traction - when it was the latest must have for your Mom and/or Dad. When a product gets to the point that your mother is using it, it's reached mass penetration.

On a side note, I have noticed that all the BMW drivers that post on MR all drive the 3 Series, which makes me laugh every time one of them references what a great piece of machinery their car is.

I think my 335xi is a great piece of machinery...compared to my pos previous.

 

[ryannel2003]

Not true at all. In reality, it's folks who buy truuuuks, yet have never carried a piece of lumber that are driven by ideology.

Most people who buy a BMW, Merc, Audi are looking and appreciate quality. Same deal with Mac products, I was last to like Apple but their quality and their Customer service is second to none.

Speaking of vehicles, Trucks are the biggest joke on the planet and who typically buys them, middle Americans who have little notion of quality or safety.

So you're telling me that everybody who buys a BMW 3 Series or Mercedes C-Class appreciate quality when you can go down the road to the Honda dealership and pick up a very high quality, super reliable Accord? No. I'd be willing to bet at least 50% of all people who buy entry level luxury cars are concerned about the status that is associated with those cars. I think Cadillac builds nicer luxury cars these days than BMW. Guess what? Nobody wants a Cadillac because they are scared that people think they are driving an "old persons" car.

Does this mean that everybody who buys a BMW is a wannabe? No. Some appreciate the driving experience of the BMW, but most of them don't care. They just want the blue and white roundel on the hood to show off to friends and neighbors.

 

[mantan]

So you're telling me that everybody who buys a BMW 3 Series or Mercedes C-Class appreciate quality when you can go down the road to the Honda dealership and pick up a very high quality, super reliable Accord? No. I'd be willing to bet at least 50% of all people who buy entry level luxury cars are concerned about the status that is associated with those cars. I think Cadillac builds nicer luxury cars these days than BMW. Guess what? Nobody wants a Cadillac because they are scared that people think they are driving an "old persons" car.

Does this mean that everybody who buys a BMW is a wannabe? No. Some appreciate the driving experience of the BMW, but most of them don't care. They just want the blue and white roundel on the hood to show off to friends and neighbors.

Bingo! And I still don't get where a luxury car has anything to do with relatively cheap consumer electronics device.

I got the whole bit of Apple being a premium brand when the bulk of their sales was desktops and laptops that cost twice as much as PC's.

But 70% of their revenue comes from the iPhone and the iPad. With the significant majority of the sales being heavily subsidized, the iPhone is one of the cheapest Apple items available when it comes to initial out of pocket expense.

The iPad costs about the same as a PC laptop and has enjoyed being the only game in town in the 10 inch tablet arena.

Apple is making obscene profits selling to the masses, not to the group that somehow feels they are buying a luxury item at luxury prices.

And when they decided to finally jump into the 7 inch tablet market, they are subject to the real life market forces that reside there....especially if they want to sell the 10 million units being forecast for the quarter.

That means the unwashed masses who don't drive German luxury cars, Grey Poupon or paying a blind premium just because it's Apple. Remember, a lot of core Apple owners now paid $199-$299 for their device....or $199 for their kids's iPod Touch. And they potentially paid $500-$700 for an iPad 1, 2 or 3.

For a lot of of people a Mini was going to be a second or third device...or a gift Is $329 going to soften sales a bit? Would they have sold more at $279 or $299? Or is the lure of something that's like their phone going to be enough to make them not look at the competition.

It will undoubtedly sell a lot of units...but I think a significant percentage of people are holding off due to the price.