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Summary:

Sometimes I have to wonder whether everyone has taken leave of their senses. The big “news” doing the rounds in the last twenty four hours is that Apple execs have admitted they are prepared to change the price of the iPad should consumer reception (read: sales) […]

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Sometimes I have to wonder whether everyone has taken leave of their senses. The bignewsdoing the rounds in the last twenty four hours is that Apple execs have admitted they are prepared to change the price of the iPad should consumer reception (read: sales) demand it.

Yeah, that’s right; Apple admitted it might revisit the price of the iPad sometime in the future, and change it according to sales performance. Shocking, that a company might operate according to a business plan designed to encourage sales and make money, eh? Apparently, that’s somehow mind-boggling news.

It got started because of a report by Matt Phillips of the Wall Street Journal, who wrote;

Apple intends to stay “nimble” on pricing of the iPad, possibly lowering prices if the newly unveiled tablet device fails to gain traction among consumers.

(Top prize goes to Engadget for their humorous response/headline, “Apple to be ‘nimble’ on iPad pricing, athletic on pommel horse”.)

Phillips quoted a note from Credit Suisse analyst Bill Shope who, following a meeting with Apple executives, said;

“While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),”

This only bolsters my long-held belief that analysts are, apparently, paid for pointing out the blindingly-obvious. That tendency to wrap together common sense and “what we all knew anyway” as “something new and worthy of reporting” is usually exemplified by Gene Munster, but since he’s been quiet for the last week or so, I guess Shope will have to do.

(I predict that, in the weeks ahead of the iPad launch, Munster, or some inspired analyst like him, will issue a note to the press proclaiming, “Apple’s App store sales will perform better in this quarter than in the same quarter last year.” Or it’ll be something even more obvious, like “Apple will sell more iPads this year than they did in 2009…” and I guarantee the tech press will rush to report that ‘advice’ like it’s vitally important “news.” You just wait and see.)

Confidence

The point here is that Apple is doing nothing revolutionary or surprising by admitting the fact that, according to the ebb and flow of consumer demand, it will revisit its pricing strategy for the iPad. This is what all businesses do with all products, all the time. Apple is always revising its prices; MacBooks, iMacs, iPods and iPhones get at least one price change on an annual basis. It’s not a big deal that they will do the same for the iPad, and it certainly doesn’t point to any lack of confidence in the product itself.

Let’s not forget the infamous iPhone price-cut of ‘07; after launching the iPhone with a hefty $599 asking price, Apple reduced it by a whopping $200 just a few months later. The only difference between then and now is Apple’s transparency (yeah, I can’t believe I said that either). During his keynote presentation late last month, Steve Jobs said of the iPad; “We want to get this into the hands of as many people as possible.” That is, after all, the overriding reason for the agreeably-low price of the entry-level iPad.

Here Come the Trolls

Sadly, the predictable fan-baiting didn’t take long, with the likes of Should-Know-Better-Than-That Windows evangelist Paul Thurrott writing, in a blog post provocatively entitled “Do Not, Under Any Circumstances, Buy an iPad”;

Following news that I was right about Apple’s decision to not allow iPad pre-orders would cause many potential buyers to reassess things, comes this unbelievable bit of news directly from Apple itself: The company said that it would aggressively lower prices on the iPad if/when it doesn’t take off in the marketplace.

Aside from the clumsy jumble of clauses and inventive use of the adjective ‘aggressively’, (as far as I can see, neither Shope nor Phillips ever used that word) I really want to point out, one last time, and for the record — this is not “unbelievable” news. Far from it. It is, in fact, the most ordinary, run-of-the-mill, standard business practice, entirely believable news one could expect from a consumer electronics company. (Quite what Apple’s flexible pricing strategy has to do with Thurrott’s theory about the inability to pre-order an iPad is beyond me; can anyone say “straw man?”)

It comes down to this; the wider tech press are, inexplicably, falling over themselves to write-off the iPad as a failure before it’s even out of the starting gate. (Don’t forget, the iPod was panned by critics and tech “experts” when it first launched. The iPhone was subject to its own fair share of harsh criticism, too.)

No one can say exactly how successful the iPad will be, and while there’s no harm in speculating (after all, much Apple coverage is precisely that) it’s sad to see how some corners of the tech community choose to interpret every little thing Apple does (or says it might do) as “evidence” of failure.

I think I’m being rational and level-headed. You might think I’m a shameless fanboy. Either way, let me know exactly what you think in the comments below.

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  1. I agree that many analysts do a crap job but if you’re going to throw stones at somebody for the quality of their writing (as opposed to the quality of their research, analysis, or original thought) a criticism like “clumsy jumble of clauses and inventive use of the adjective ‘aggressively’” looks very silly indeed when you use the wrong grammatical term. The word ‘aggressively’ is an adverb. In this instance it modifies the verb ‘lower’.

  2. Whoops, you’re quite right, it is an adverb, and *I* should have known better!

  3. This article is so hypocritical that it’s almost not funny. You rip on other bloggers, anylysts, reviews, ect.. about always pointing out the obvious. Meanwhile the whole time you were just “pointing out the obvious”. Very few reporters get the luxury of reporting something nobody knows. Your not one of them.

    But I see what your trying to do and applaud you for that. To bad your failing hard with your motives.
    Peace out,
    Love Lulz

  4. LOL, My “motives”? Well, I’m just sharing what’s on my mind, but I’m glad we have you here to figure out my motives!

    PS. I *do* hope my motives nefarious, that would be terribly exciting!

  5. I could see how this might be news. Didn’t Apple pretty much raise the price of everything a few years back? Only recently have they tried to be competitive price wise. So overall I could see how historically Apple does not lower prices to compete, but recently they have.

  6. While doing this would be smart, it was foolish of Apple to publicly announce it. It will induce potential buyers to wait until the price cut actually happens, lowering current sales. A self-fulfilling prophecy as it were.

  7. I’m very happy with the $499 price point.

    But the $100 upgrade path is pointless. I know apple has always had the $100 double your storage on iPods for years but making it $50 to go to 32GB would be much better.

  8. In other news, this just in, Apple says that, thus far, not a single person has ordered an iPad. Clearly this is a stunning launch failure!

    reinharden

  9. I initially was going to order the iPad when it came out, but I have since reconsidered.

    First, the iPad can do no more than my iPhone other than increase the space between the icons on the screen. My fingers are not that fat, so that’s not going to be a big sell point for me. My iPhone, in fact, can do more than the iPad since, among other things, my iPhone has a camera and built in 3G and GPS capability. Why would I pay more for a device and more for monthly service to do exactly what my iPhone can do (minus the camera)?

    Second, I was one of those people who had to have the original iPhone for $600 when it first came out. I’m not complaining about that because it was a totally revolutionary device that was unlike anything I had ever experienced, and I was totally cool because I was one of the first ones to have it (Or at least I thought I was cool, and that’s all that matters, right?)… There is a price to be at the front of cutting-edge technology. What I am saying is that I am not going to pay for something now that has the potential of decreasing in price later, especially when it doesn’t do anything extraordinarily better (or worse) than something I already have.

    Get ready to lower the price, Apple execs. I’m pretty sure you’re not going to sell too many of these over-sized, reduced-capability iPhones. And you may want to think about firing Steve Jobs again… I think his mojo may have left with his old liver.

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