Before the iPad was introduced, pundits, as Steve Jobs gleefuly pointed out, anticipated that the device would retail for as much as $999. Instead, Jobs shocked and pleasantly surprised everyone when he announced that the entry level price for the iPad would sell for just $499 – which isn’t all that bad when you consider that the iPad is simply a glorified iPod Touch.
Customer reaction to the iPad has been relatively lukewarm, as far as new and upcoming Apple products go, and to be fair, there’s no way of knowing if the iPad will strike a chord with consumers in the way that Apple is expecting. The iPad is certainly an intriguing device, but it’s definitely not as revolutionary as the iPhone. At the same time, when the iPod was first announced in 2001, the revolutionary impact it created wasn’t fully appreciated until 2003/2004 at the earliest.
Apple, though, isn’t deluding itself into thinking it has another iPhone on its hands, and according to a recent report in the Wall Street Journal, it’s more than willing to consider price-cuts on the iPad if sales come in below expectations. (Edit: Don’t by the iPad!)
The WSJ cites a research note from Credit Suisse analyst Bill Shope who recently met with Apple officials to discuss the iPad and its potential to cannibalize sales of other Apple products.
“Apple wants the iPad to be the best device for a few key use cases,” Shope writes, “For instance, the company believes it could eventually be seen as superior to both handheld and notebook devices for browsing the Internet, using the App Store, and consuming mobile media (video, photos, and e-books). Nevertheless, in other areas, notebooks, the iPhone, or an iPod may be more appropriate. This clear segmentation of capabilities suggests that cannibalization may be less of a concern than most currently believe.”
Shope continues, “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).”
The iPad may not seem exceedingly appealing at the moment, but once developers start to make use of its large screen, there’s no telling how many ‘killer apps’ will come down through the pipeline and make the iPad a must-have multipurpose media consumption, gaming, and e-book reader device.