Why Nobody Can Match the iPad’s Price • Hacker News Board

Re: Why Nobody Can Match the iPad’s Price

#11

Post by haribilalic » Sun, Feb 20, 2011, 3:55 AM UTC

drhodes wrote: post #6

From the mouth of the CEO of motorola, the wifi-only Xoom to be priced at $600, he announced Wednesday. http://arstechnica.com/gadgets/news/2011/02/motorola-xoom-ta...

That's still $100 more expensive than the cheapest WiFi iPad and only $29 cheaper than the cheapest WiFi + 3G iPad.

Re: Why Nobody Can Match the iPad’s Price

#12

Post by cosmicray » Sun, Feb 20, 2011, 4:01 AM UTC

> Apple has partnered with a few retail chains such as Best Buy and Walmart, but those stores always seem to get a small number of units in stock. Hiner rationalizes that the true purpose of these partnerships is probably to help spread the marketing message, not so much to sell iPads.

The display unit at WalMart is behind plexiglass. If you want to touch it, someone with a key has to open the cover. I'm glad to see current Apple products at WalMart, but the actual sales experience is significantly less than going to an Apple store, or to BB.

IMHO, the real secret behind the iPad's price is supply chain management and very astute inventory control. Idle inventory can really wreck your bottom line.

Re: Why Nobody Can Match the iPad’s Price

#13

Post by Samuel_Michon » Sun, Feb 20, 2011, 4:04 AM UTC

yock wrote: post #2

Apple can sell the iPad for $500 because they have the iTunes store backing it. They know they don't need to make money on the sale of the device because the entire point of buying the device is to buy apps for it, and Apple as we all know gets a cut from every sale. Other manufacturers don't have this working for them.

"[Apple knows it doesn't] need to make money on the sale of the device because the entire point of buying the device is to buy apps for it,"

The opposite is true. Apple doesn't need to make money on software, because their hardware products have healthy profit margins. The iTunes Store breaks even, and it has done so for years. The same is true for the other software Apple sells.

Compared to competing products, Apple's software products are dirt cheap. Its office suite (iWork) is priced at $60 while Microsoft Office is priced at $280. Apple's photography software (Aperture) costs $80, Adobe's Lightroom costs $300. Apple's video editing suite (Final Cut) costs $1000, Avid's Media Composer costs $2300.

Re: Why Nobody Can Match the iPad’s Price

#14

Post by antimatter15 » Sun, Feb 20, 2011, 4:12 AM UTC

I guess it's also a problem with Android. When the iPad is sold for the low price, they're aiming for market share. This in turn, attracts developers which attract consumers where apple makes a nice 30%. But if Motorola competed for a low price, it wouldn't necessarily secure a future as it only furthers the Android platform, which any vendor can build on top of. Thus it doesn't make sense for any Android tablet vendors to play loss-leader, while it does for Apple to.

Re: Why Nobody Can Match the iPad’s Price

#15

Post by staunch » Sun, Feb 20, 2011, 4:20 AM UTC

> "Designing in-house means Apple doesn’t have to pay licensing fees to third parties to use their intellectual property. For instance, the A4 chip"

Isn't the A4 an ARM + PowerVR and doesn't Apple pay design licenses on both those?

Re: Why Nobody Can Match the iPad’s Price

#16

Post by runinit » Sun, Feb 20, 2011, 4:24 AM UTC

The Notion Ink Adam is cheaper...

Notion Ink Adam with LCD & WiFi (no 3G) - $375 USD Notion Ink Adam with LCD, WiFi & 3G - $425 USD

Notion Ink Adam with Pixel Qi display & WiFi (no 3G) - $499USD Notion Ink Adam with Pixel Qi display, WiFi & 3G - $549 USD

Re: Why Nobody Can Match the iPad’s Price

#17

Post by [deleted] » Sun, Feb 20, 2011, 4:26 AM UTC

fuzzmeister wrote: post #4

"Apple is the most vertically integrated company in the world." I struggle to see how that statement could be true for a company that outsources all of its manufacturing.

[deleted]

Re: Why Nobody Can Match the iPad’s Price

#18

Post by danilocampos » Sun, Feb 20, 2011, 4:27 AM UTC

gabrielroth wrote: post #7

One factor that the author doesn't mention is Apple's success at lining up deals with component manufacturers. A couple years ago (before anyone had heard of the iPad) they locked in great prices on flash memory and LCD displays. They could do that because they were about to invent a huge market, and they knew it. Anyone trying to get into the tablet business in 2010 had to pay much, much more. Steve Jobs and Johnny…

A hundred upvotes, really. Tim Cook turned Apple from a sloppy, cluttered mess to a perfectly tuned and calibrated machine. He designs business processes like Ive designs hardware enclosures. He's still at it, too, telling investors during the last earnings call that Apple once again snapped up a boatload of supply on an unnamed type of component.

I bet he'd be amazing at Starcraft, once he learned the ropes.

Re: Why Nobody Can Match the iPad’s Price

#19

Post by flyt » Sun, Feb 20, 2011, 4:33 AM UTC

staunch wrote: post #15

> "Designing in-house means Apple doesn’t have to pay licensing fees to third parties to use their intellectual property. For instance, the A4 chip" Isn't the A4 an ARM + PowerVR and doesn't Apple pay design licenses on both those?

yes, and they pay Samsung to make them too

Re: Why Nobody Can Match the iPad’s Price

#20

Post by flyt » Sun, Feb 20, 2011, 4:34 AM UTC

haribilalic wrote: post #11

drhodes wrote: post #6

From the mouth of the CEO of motorola, the wifi-only Xoom to be priced at $600, he announced Wednesday. http://arstechnica.com/gadgets/news/2011/02/motorola-xoom-ta...

That's still $100 more expensive than the cheapest WiFi iPad and only $29 cheaper than the cheapest WiFi + 3G iPad.

and it's competing with a product announced over a year ago, not the next generation of iPad due any day now.