Apple May Lower the Price of the iPad: This is Not News

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.)


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.

Related GigaOM Pro Research: