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[Cheebo]

Still doing pretty good with no tv advertisement.

They needed tv ads, they needed, something big. A set date actual release date. Actual real world hype. Before anyone hears about this thing in the general public iPad mini will be be revealed by Apple and on the front page of all the major papers and big news sites. Google needed to step up their game and they pulled another Galaxy Nexus style launch.

To be fair, while the Nexus 7 is a good device - it is largely ignored by the mass media because its not a mainstream device yet. Same could be said of why the Samsung GS3 has had to fight tooth and nail to get mainstream coverage whereas the very suggestion that an iPhone might burn you if you remove it from an open flame will gather mass coverage.

Mass coverage grows as the number of units ship, and Samsung is starting to claim their place as the representative of the Android phone/tablet market

It is a pretty damn solid device but the media is completely ignoring it, the mini iPad is sucking up all the air in the room and it isn't even official yet. I mean can you imagine what will happen when Apple shows this off in a few months timed for a holiday season launch? Nexus 7 will just be completely forgotten, most people shopping this fall will still likely have no clue it even exists. Which is absurd, Google should be able to hire people to put on a real launch event.

I mean Amazon hasn't been in the hardware game long yet they managed the Kindle Fire launch way better. It had an actual release date that everyone got it by with a lot of commercials and tons of mainstream press. It's not like Apple is the only one who knows how to do this.

The Nexus 7 is a device worthy of a lot better treatment than Google is able to give it.

 

[Vic]

The iPad mini rumors got WAY more press this past week, especially mainstream press despite Nexus 7 launching this Friday (went on sale in Gamestop, Staples, etc and Google shipped out the initial pre-order batches Friday).

I don't know. There's been a lot of report about the N7 selling out fast at retail outlets in the US.

 

[kehs]

Cheebo going into over drive.

 

[Nemo]

Mini ipads gotta be 200 at best. iPad 2 can easily be had for 300 for the past few months

 

[Cheebo]

I don't know. There's been a lot of report about the N7 selling out fast at retail outlets in the US.

The tech blogs? Yeah. I mean look at nytimes. Front page story on iPad. Nada on Nexus 7. Nexus 7 doesn't even have a single article focused on it on the front page of the NYT's tech page and it launched this weekend. iPad has multiple front page articles there.

I am very excited to get my Nexus 7 in the mail monday and hell might use it more than my iPad 3 due to its size but how Google has managed this launch is is sad and confusing. Nexus 7 should be everywhere right now. The launch should have been an event with people lined up outside of stores like they do for game systems, for apple products, or hell like they do for new windows operating systems.

 

[Man]

Developers: Do we need to add more GUI layouts to our Xcode projects for this? *tears up*

 

[Vic]

The tech blogs? Yeah. But that is far from the mainstream press. But look at nytimes. Front page story on iPad. Nada on Nexus 7. Nexus 7 doesn't even have a single article focused on it on the front page of the NYT's tech page and it launched this weekend. iPad has multiple front page articles there.

It should sell a good amount through words of mouth. Big news outlet should catch-up with it pretty soon.

I am very excited to get my Nexus 7 in the mail monday and hell might use it more than my iPad 3 due to its size but how Google has managed this launch is is sad and confusing.

Can't disagree with this. It's been a clusterfuck of a launch.

 

[Vyer]

Cheebo going into over drive.

As far as how Google handled the launch, he's right.

 

[kehs]

As far as how Google handled the launch, he's right.

You mean the one where you could pre-order with shipping time of 2-3 weeks, and they started shipping in week 2?

 

[malyce]

Mini ipads gotta be 200 at best. iPad 2 can easily be had for 300 for the past few months

$249 8GB
$299 16GB
While keeping last gen's 10" iPad @ $399

or

$299 16GB
$399 32GB
Oh, I'm sorry, you said 10"? Those start @ $499

It's apple, they'll price it however they like, they're still gonna sell them faster then they'll be able to manufacture the damn thing.

 

[Liu Kang Baking A Pie]

$249 8GB
$299 16GB
While keeping last gen's 10" iPad @ $399

or

$299 16GB
$399 32GB
Oh, I'm sorry, you said 10"? Those start @ $499

It's apple, they'll price it however they like, they're still gonna sell them faster then they'll be able to manufacture the damn thing.

There's no reason to make this device if it's not to compete on price. It will start at $199 or even lower.

 

[malyce]

There's no reason to make this device if it's not to compete on price. It will start at $199 or even lower.

Against/With who? You do realize apple sells 32/64 GB iPod Touch for $299/$399 right? They shipped 20 million iPads last quarter, compete with who?

 

[Liu Kang Baking A Pie]

Against/With who? You do realize apple sells 32/64 GB iPod Touch for $299/$399 right? They shipped 20 million iPads last quarter, compete with who?

There is no legit competition for the iPod touch or 10" iPad, and the things that are similar to them have similar prices.

 

[Leona Lewis]

Against/With who? You do realize apple sells 32/64 GB iPod Touch for $299/$399 right? They shipped 20 million iPads last quarter, compete with who?

This isn't complicated. Apple was the clear market leader with the iPod, but it solidified its dominance by introducing the iPod Mini/Nano and then the iPod Shuffle.

In tech, and especially growing segments like tablets, the only one you want cannibalizing your potential sales is yourself.

 

[malyce]

There is no legit competition for the iPod touch or 10" iPad, and the things that are similar to them have similar prices.

This isn't complicated. Apple was the clear market leader with the iPod, but it solidified its dominance by introducing the iPod Mini/Nano and then the iPod Shuffle.

In tech, and especially growing segments like tablets, the only one you want cannibalizing your potential sales is yourself.

My point is, pricing the thing @ $199 does nothing for Apple. They're first and foremost a hardware company, that's where most of their profits come from. They're not into razor thin profits, they're not trying to lure into their ecosystem with cheap prices, and they're not hurting for market share. So give me a reason why they need to price it @ $199? Come christmas it's still gonna destroy the Fire/Fire 2 and the Nexus in sales despite being $100 more.

 

[Liu Kang Baking A Pie]

My point is, pricing the thing @ $199 does nothing for Apple. They're first and foremost a hardware company, that's where most of their profits come from. They're not into razor thin profits, they're not trying to lure into their ecosystem with cheap prices, and they're not hurting for market share. So give me a reason why they need to price it @ $199? Come christmas it's still gonna destroy the Fire/Fire 2 and the Nexus in sales despite being $100 more.

Because it's competing with other $199 products.

What's confusing about this? People buying $200 tablets can either buy Apple or Google's tablets. What do you think Apple wants?

 

[Al-ibn Kermit]

Because it's competing with other $199 products.

What's confusing about this? People buying $200 tablets can either buy Apple or Google's tablets. What do you think Apple wants?

Has Apple ever sold a product for basically no profit or even a loss?

 

[Zeth]

I'm starting to lean toward $200 more than 300. After reading so much about Apple's supply chain dominance, I wouldn't be surprised if Apple could still pull out a relatively healthy margin from a $200 machine. Google can put one together for $150ish through Asus. Apple controls a massive portion of the world's sources of half these components. They might get a better deal.

 

[Liu Kang Baking A Pie]

Has Apple ever sold a product for basically no profit or even a loss?

Are you assuming this is what's going to happen here? They're going to use screens and parts they've been using for years.

Apple gets cheaper prices on components than all of their competition, and they manage their inventory better than all of their competition. They can easily make a price-competitive product and still make a profit. If they couldn't, they wouldn't be doing this at all.

 

[Souless_PJ]

I'm starting to lean toward $200 more than 300. After reading so much about Apple's supply chain dominance, I wouldn't be surprised if Apple could still pull out a relatively healthy margin from a $200 machine. Google can put one together for $150ish through Asus. Apple controls a massive portion of the world's sources of half these components. They might get a better deal.

Yep. If Google can hit that price point, then Apple using iPad 2 parts with their supply chain management will be making profits at the same price. Plus they have high margin accessories and the app / music store to supplement.

 

[Al-ibn Kermit]

Are you assuming this is what's going to happen here? They're going to use screens and parts they've been using for years.

They're still not going to make 50% profit selling at $200. This is a product that will draw away some sales from their big brother iPad models, so you have to set a base price that you will be okay with for several years.

I never heard anybody say they have to be at $200 to be "competitive". It may make more sense to not try to be at $200 if it's going to sacrifice 10" iPad sales.

 

[malyce]

Only thing running iOS this shopping season for $199 without a 2 year contract will be a 8/16GB 5th Gen iPod Touch. You guys can keep waiting on those $199 iPads. That's like waiting for $699 11" MacBook Airs.

 

[noah111]

$200 iPad is insanity if you ask me. Maybe for an 8GB model (with emphasis on the cloud for media consumption), but the standard 16GB entry is sure to be $300.

$300: 16GB iPad mini
$400: 16GB iPad 2
$500: 16GB iPad 3rd gen

 

[Liu Kang Baking A Pie]

They're still not going to make 50% profit selling at $200. This is a product that will draw away some sales from their big brother iPad models, so you have to set a base price that you will be okay with for several years.

I never heard anybody say they have to be at $200 to be "competitive". It may make more sense to not try to be at $200 if it's going to sacrifice 10" iPad sales.

I really don't want to post the string of relevant Steve Jobs quotes that have already been posted everywhere.

Price umbrellas, cannibalize yourself, etc etc.

 

[Cheebo]

Only thing running iOS this shopping season for $199 will be a 8/16GB 5th Gen iPod Touch. You guys can keep waiting on those $199 iPads. That's like waiting for $699 11" MacBook Airs.

The mac market is completely different and not applicable. They only have a sliver of the PC market and would no matter how cheap they went. There is no reason to cut profit margin to try to gain marketshare there. Because it is not winnable. The tablet market is far closer to the mp3 player market in terms of Apples ability to control the vast majority of the market.

And what was their mp3 player market strategy? Go cheap. Go really really cheap and kill off the low-end market that was growing in the wake of the rise of the expensive classic iPod.

 

[numble]

They're still not going to make 50% profit selling at $200. This is a product that will draw away some sales from their big brother iPad models, so you have to set a base price that you will be okay with for several years.

I never heard anybody say they have to be at $200 to be "competitive". It may make more sense to not try to be at $200 if it's going to sacrifice 10" iPad sales.

If they dropped the iPad 2 to $250 in March, with a 10" screen, 16 gb, large battery, and 45nm processor, it still would've been at 20% margin. Now they can use cheaper and smaller components.

I don't know why you keep worrying about Apple's margins. Who cares that they'll probably make a little less money? The iPad is lower margin than the iPhone, the iPod Touch is lower margin than the iPhone, they'll sell them anyway. The iPhone 3GS, iPod Touch, and iPads all cannibalize higher margin 4S sales, they'll sell them anyway.

 

[Nemo]

They're still not going to make 50% profit selling at $200. This is a product that will draw away some sales from their big brother iPad models, so you have to set a base price that you will be okay with for several years.

I never heard anybody say they have to be at $200 to be "competitive". It may make more sense to not try to be at $200 if it's going to sacrifice 10" iPad sales.

I think peeps are overestimating the whole sacrificing 10 inch iPad sales

It'll be the premium model now, and hell, if they play their cards right it'll be valuated even more than now where it's on it's own. Even with the Air, which is pretty damn great for portability, the macbook pro is still the most popular model and seen as the king of notebooks

 

[Al-ibn Kermit]

If they dropped the iPad 2 to $250 in March, with a 10" screen, 16 gb, large battery, and 45nm processor, it still would've been at 20% margin. Now they can use cheaper and smaller components.

I don't know why you keep worrying about Apple's margins. Who cares that they'll probably make a little less money? The iPad is lower margin than the iPhone, the iPod Touch is lower margin than the iPhone, they'll sell the anyway. The iPhone 3GS cannibalizes 4S sales, they'll sell them anyway.

The iPhone, iPod Touch, and iPad don't really have overlapping markets. A 9.7" iPad vs a 7.85" at half the price is definitely going to make customers in the Apple store think of getting the cheaper option.

That could do more damage to their full size iPad sales than any non-Apple tablet.

 

[noah111]

I don't know why you keep worrying about Apple's margins. Who cares that they'll probably make a little less money?

Umm.. perhaps, I don't know, APPLE? This isn't about what is possible or what we want, it's about what is likely to happen and what they're most likely to do given their track record. They have literally zero reason to release a 16gb $200 iPad at this point. The comparisons to the way the handled the Mac and MP3 markets are irrelevant as well. This is a market where apple is playing the dominant role and arguably birthed the market itself. There is little to no need fir real strategic pricing against competition at this point other than other iDevices, namely the iPods.

 

[Liu Kang Baking A Pie]

The weirdest part of Internet tech analysis is this strange idea that people buying your products is bad.

They have literally zero reason to release a 16gb $200 iPad at this point.

What.

 

[giga]

The 2012 16GB iPad 2 has a BOM and manufacturing cost of about $245. About $100 of that cost is from the display and touchscreen. They sell the device for $400 currently. That's a 39% margin.

In comparison, the 16GB Nexus 7 has a BOM and manufacturing cost of about $166. About $60 of that cost is from the display and touchscreen. They sell the device for $250 currently. That's a 34% margin.

The main component cost difference between the two are in the display, processor, battery, and mechanical/electrical. It's not hard to imagine that Apple could match the component cost of the 16GB Nexus 7 or even go below because it'll use a lower resolution display and have the advantage of an Apple supply chain. The A5 already costs $6 less than the Tegra 3. I'm sure the 32nm fabrication has contributed to its lower cost.

 

[Cheebo]

The iPhone, iPod Touch, and iPad don't really have overlapping markets. A 9.7" iPad vs a 7.85" at half the price is definitely going to make customers in the Apple store think of getting the cheaper option.

That could do more damage to their full size iPad sales than any non-Apple tablet.

Except the 10 inch one is going to be far more powerful (especially after iPad 4 launches in March) and has a retina display. All that this will lack.

That is like saying the 11 inch MacBook Air hurts the Retina MacBook Pro.

 

[Alligatorjandro]

I would highly consider a $200 ipad and I dont really have a need for tablets.

 

[Al-ibn Kermit]

Except the 10 inch one is going to be far more powerful (especially after iPad 4 launches in March) and has a retina display. All that this will lack.

That is like saying the 11 inch MacBook Air hurts the Retina MacBook Pro.

Tech specs and resolution aren't nearly as important for tablets as they are for laptops. At least compared to pricing.

 

[numble]

The iPhone, iPod Touch, and iPad don't really have overlapping markets. A 9.7" iPad vs a 7.85" at half the price is definitely going to make customers in the Apple store think of getting the cheaper option.

That could do more damage to their full size iPad sales than any non-Apple tablet.

iPods compete with each other, and Macbooks compete with each other. The person buying the $999 MacBook Air is not going to buy the $2199 MacBook Pro. The person buying an iPod Shuffle is not going to buy the over twice-priced nano.

The iOS devices definitely have overlapping markets. There are many people even on this forum that own an iOS device that isn't an iPhone while using Android and saying its the "best of both worlds." I know many people that use an iPod Touch and carry a dumbphone around. The iPod Touch mimics the current-gen iPhone more than this rumored mini iPad will mimic the current gen iPad.

 

[Lace]

I would highly consider a $200 ipad and I dont really have a need for tablets.

I see it being released at $229.99 for 8gb, would allow a slightly better margin. I can't imagine anyone who could say no at a price point like that (excluding fanboys). It would become an impulse buy at that point.

 

[malyce]

The 2012 16GB iPad 2 has a BOM and manufacturing cost of about $245. About $100 of that cost is from the display and touchscreen. They sell the device for $400 currently. That's a 39% margin.

In comparison, the 16GB Nexus 7 has a BOM and manufacturing cost of about $166. About $60 of that cost is from to the display and touchscreen. They sell the device for $250 currently. That's a 34% margin.

The main component cost difference between the two are in the display, processor, battery, and mechanical/electrical. It's not hard to imagine that Apple could match the component cost of the 16GB Nexus 7 or even go below because it'll use a lower resolution display and have the advantage of an Apple supply chain. The A5 already costs $6 less than the Tegra 3. I'm sure the 32nm fabrication has contributed to its lower cost.

I think this is where everyone got confused, so let's start over. Apple could, release a $200 iPad junior this shopping season, but they don't need to, nor will they. At $299 they're gonna sell more than they'll be able to make, so please explain to me why would they shave an extra $100 profit per device just to please the likes of you when they already have more than enough people willing throwing their credit cards at their monitors? Or maybe Apple doesn't like money?

 

[Liu Kang Baking A Pie]

I think this is where everyone got confused, so let's start over. Apple could, release a $200 iPad junior this shopping season, but they don't need to, nor will they. At $299 they're gonna sell more than they'll be able to make, so please explain to me why would they shave an extra $100 profit per device just to please the likes of you when they already have more than enough people willing throwing their credit cards at their monitors?

Why would they sell a free and $100 iPhone when anyone would pay $200?

Apple is doing this because they like money, not because they don't. I truly, truly do not understand how a few of you don't get it.

 

[Cheebo]

I think this is where everyone got confused, so let's start over. Apple could, release a $200 iPad junior this shopping season, but they don't need to, nor will they. At $299 they're gonna sell more than they'll be able to make, so please explain to me why would they shave an extra $100 profit per device just to please the likes of you when they already have more than enough people willing throwing their credit cards at their monitors? Or maybe Apple doesn't like money?

Because they don't want just a large part of the tablet market. Or a majority of it. They want ALL of it. Like they did with the mp3 player market where they releases budget priced iPods.

They have people going crazy for 4S so why sell a free 3GS?

 

[Lace]

I think this is where everyone got confused, so let's start over. Apple could, release a $200 iPad junior this shopping season, but they don't need to, nor will they. At $299 they're gonna sell more than they'll be able to make, so please explain to me why would they shave an extra $100 profit per device just to please the likes of you when they already have more than enough people willing throwing their credit cards at their monitors? Or maybe Apple doesn't like money?

The ability to destroy the appeal of android tablets that currently undercut them seems like a good long term reason.

 

[Recon]

The ability to destroy the appeal of android tablets that currently undercut them seems like a good long term reason.

Apple chooses to wage that war in the courtroom, not in the marketplace.

 

[Vyer]

You mean the one where you could pre-order with shipping time of 2-3 weeks, and they started shipping in week 2?

over drive indeed

 

[Cheebo]

Apple chooses to wage that war in the courtroom, not in the marketplace.

No they chose to wage it in the marketplace as well.

 

[Lace]

Apple chooses to wage that war in the courtroom, not in the marketplace.

Under Jobs I could see that, but Tim Cook seems to have little interest in following that path.

 

[malyce]

Why would they sell a free and $100 iPhone when anyone would pay $200?

Apple is doing this because they like money, not because they don't. I truly, truly do not understand how a few of you don't get it.

Because they don't want just a large part of the tablet market. Or a majority of it. They want ALL of it. Like they did with the mp3 player market where they releases budget priced iPods.

They have people going crazy for 4S so why sell a free 3GS?

The ability to destroy the appeal of android tablets that currently undercut them seems like a good long term reason.

*sighs*

You guys do realize you're comparing the profit margins of a $200 tablet to a $375 dollar smartphone right? You guys do realize upon receiving that phone that you're bound by a contract for 2 years right? And for every "free" 3GS Apple sells AT&T pays them $375 upfront right? They're 2 completely different things. Why doesn't Apple just sell the 3GS from the apple store for $200 unlocked to "destroy the appeal" of android phones that currently undercut them? Why? Because apple likes money. They're not gonna cut into their profit margins if there is no need to. They make a fuckton of money every quarter and would like to continue doing so.

Edit: The BOM for the 3GS in 2009 was ~$180, I'm pretty sure they're much cheaper to produce now, so why doesn't apple just sell them for ~$250 unlocked? Why sell them for $375?

 

[Liu Kang Baking A Pie]

They're not gonna cut into their profit margins if there is no need to. They make a fuckton of money every quarter and would like to continue doing so.

Your mistake is the assumption that this product would reduce their margins.

It will have a comparable profit margin and sell in much larger quantities. It will be just as good or better for Apple than not releasing it at all.

 

[giga]

I think this is where everyone got confused, so let's start over. Apple could, release a $200 iPad junior this shopping season, but they don't need to, nor will they. At $299 they're gonna sell more than they'll be able to make, so please explain to me why would they shave an extra $100 profit per device just to please the likes of you when they already have more than enough people willing throwing their credit cards at their monitors? Or maybe Apple doesn't like money?

Well, I don't know about the $200 price point as that margin is only 20% for the Nexus 7, but $250 while retaining their current margins is very doable.

 

[malyce]

Your mistake is the assumption that this product would reduce their margins.

It will have a comparable profit margin and sell in much larger quantities. It will be just as good or better for Apple than not releasing it at all.

You fail to understand that whether it's priced at $299 or $199 Apple will only be able to make X amount of iPads. They'll sell X amount of iPads whether they're priced at $199 or $299, why throw away the extra $100? Does apple not like money?

 

[Lace]

*sighs*

You guys do realize you're comparing the profit margins of a $200 tablet to a $375 dollar smartphone right? You guys do realize upon receiving that phone that you're bound by a contract for 2 years right? And for every "free" 3GS Apple sells AT&T pays them $375 upfront right? They're 2 completely different things. Why doesn't Apple just sell the 3GS from the apple store for $200 unlocked to "destroy the appeal" of android phones that currently undercut them? Why? Because apple likes money. They're not gonna cut into their profit margins if there is no need to.

I'm sure Apple would have no problem selling it at $300 and make that extra profit. However that leaves the tablets like the Nexus 7 to thrive. I don't see Apple releasing it for more then $250. We are looking Apple as a company that wants to avoid that price umbrella and would rather eat up their own market then let another company do it. If you still can't see the long term logic look at the history with the iPod and explain why they "had" to release a cheaper iPod.

 

[kehs]

over drive indeed

I'm not one trumpeting a product that's not even announced.