Tech speculators are looking to Apple’s choice of processors in the upcoming iPad 3 as clues that Cupertino will continue to keep its tablet prices steady. But with all the excitement surrounding the next iPad, this could be the year that Apple really cashes in.
When it comes to setting price for new products, production and components costs factor heavily into the decision. If you traverse the tech wires, then doubtless you’ve seen itemized price breakdowns of the iPhone and iPad, which reveal a better-focused profit margin for what each sold unit brings in. (Apple’s hefty marketing budget also has to be taken into account as well.) To this end, tech analysts are weighing the possible price of the iPad 3 (and iPhone 5 as well) based on which chipsets they decide to go with.
Planet Insane today asserts that, “Although bringing in the Gobi 5 chipset will not help solve the two or four core dilemma of Apple, it seems to be a good choice for the incorporating LTE in Apple’s mobile devices that will be launched this year. Moreover, this may give them significant savings when it comes to the cost of their production and allow their iPhone 5 and iPad 3 to stay in a similar price range for all its other introductory devices.” Much of this thinking is based on the fact that the Gobi 5 will also work with different network connection technologies, essentially creating “one chip to rule them all.”
As a result of this thinking, many believe that the iPad 3 will retain its price point, with the intro model coming in at $500. But for as much as the economics of the chips in the iPad 3 would enable Apple to keep their priced fixed, why would they bother?
Most recent data reveals that Apple’s iPad 3 is poised to dominate the tablet market in new ways that will make its already domineering history seem squalid. We’ve already reported on several eyebrow-raising reports about how a super majority of Kindle users are ready to purchase the iPad 3, and that prospective users essentially aren’t concerned about its price. It appears that the prospect of a 4G LTE iPad 3 will, according to tech analysts, drive massive sales, price hike or not.
So, why wouldn’t Apple take advantage of the public’s seemingly blank check for purchasing the iPad 3? For the first two generations of the iPad, Cupertino has maintained a price-to-value-leading price point in order to dominate the market, forcing competitors to cede the premium tablet segment of the market to Apple and offer cheaper, smaller, lower-profile tablets like the Kindle. But now, even that market model seems to be failing; the tablet market belongs to Apple, and I think they will suck it dry.
After all, the teaser photo of the iPad with no home button already has people second-guessing the notion that the overall form factor and chassis of the iPad 3 will be a mere refresh of the iPad 2. We suggested the outside chance of a new iPad 3 form factor back on February 8th. If Apple delivers on a new tablet design that shocks and awes consumers, the sales explosion will be colossal.
It is also worth noting that all of these late-breaking perspectives about chips and pricing refute much of what has already been said about the iPad 3 pricing. We reported in the past on how adding 4G LTE into the iPad mix could drive up prices, and that new components and form factor would actually drive costs up for both the iPhone 5 and iPad 3.
It is just a hunch, but I don’t think this is going to be a “refresh” year for the iPad by any measure. Apple will be overhauling the iPad, but in design and quite possibly by price.
When it comes to setting price for new products, production and components costs factor heavily into the decision. If you traverse the tech wires, then doubtless you’ve seen itemized price breakdowns of the iPhone and iPad, which reveal a better-focused profit margin for what each sold unit brings in. (Apple’s hefty marketing budget also has to be taken into account as well.) To this end, tech analysts are weighing the possible price of the iPad 3 (and iPhone 5 as well) based on which chipsets they decide to go with.
Planet Insane today asserts that, “Although bringing in the Gobi 5 chipset will not help solve the two or four core dilemma of Apple, it seems to be a good choice for the incorporating LTE in Apple’s mobile devices that will be launched this year. Moreover, this may give them significant savings when it comes to the cost of their production and allow their iPhone 5 and iPad 3 to stay in a similar price range for all its other introductory devices.” Much of this thinking is based on the fact that the Gobi 5 will also work with different network connection technologies, essentially creating “one chip to rule them all.”
As a result of this thinking, many believe that the iPad 3 will retain its price point, with the intro model coming in at $500. But for as much as the economics of the chips in the iPad 3 would enable Apple to keep their priced fixed, why would they bother?
Most recent data reveals that Apple’s iPad 3 is poised to dominate the tablet market in new ways that will make its already domineering history seem squalid. We’ve already reported on several eyebrow-raising reports about how a super majority of Kindle users are ready to purchase the iPad 3, and that prospective users essentially aren’t concerned about its price. It appears that the prospect of a 4G LTE iPad 3 will, according to tech analysts, drive massive sales, price hike or not.
So, why wouldn’t Apple take advantage of the public’s seemingly blank check for purchasing the iPad 3? For the first two generations of the iPad, Cupertino has maintained a price-to-value-leading price point in order to dominate the market, forcing competitors to cede the premium tablet segment of the market to Apple and offer cheaper, smaller, lower-profile tablets like the Kindle. But now, even that market model seems to be failing; the tablet market belongs to Apple, and I think they will suck it dry.
After all, the teaser photo of the iPad with no home button already has people second-guessing the notion that the overall form factor and chassis of the iPad 3 will be a mere refresh of the iPad 2. We suggested the outside chance of a new iPad 3 form factor back on February 8th. If Apple delivers on a new tablet design that shocks and awes consumers, the sales explosion will be colossal.
It is also worth noting that all of these late-breaking perspectives about chips and pricing refute much of what has already been said about the iPad 3 pricing. We reported in the past on how adding 4G LTE into the iPad mix could drive up prices, and that new components and form factor would actually drive costs up for both the iPhone 5 and iPad 3.
It is just a hunch, but I don’t think this is going to be a “refresh” year for the iPad by any measure. Apple will be overhauling the iPad, but in design and quite possibly by price.
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