iPad Pricing Continued

There’s a great article on Beta News by Joe Wilcox detailing the impact that the iPad has had on Apple’s overall product lineup, especially their mobile products. My favorite quote is;

“Suddenly, the cheapest, functional Mac portable is $499, or half what it was on Monday. Consumers who wanted a Mac but couldn’t afford one can get one for under 500 bucks. The average consumer doesn’t care about the operating system, whether iPhone OS 3.2 or Snow Leopard. Mac wannabes will care more about what the device can do for them. Apple has packed most of the basic, most appealing functions of the Mac portable — including iWork — into iPad. The pundits evaluating iPad as an ebook reader first should look at the device as ebook reader second or third — or even last. The iPad is a portable Mac first, which is the real emphasis behind the device’s Website (Give it a real look).”

In a followup article discussing the iPad price, and to highlight the amazing range of Apple products, Wilcox used this image from Boy Genius Report

At the lowest end is the one function ultra portable iPod Shuffle. From there the iPhone/iPod Touch parade of portable gaming/web browsing/PDA devices starts at every possible price point. The iPad gives Apple a mobile netbook competitor at $499. Mac Mini gives Apple a desktop machine under $1000, then the new MacBook arrives at $999.

At the high end, Apple has the MacBook Pro/iMac. The highest price is dedicated to the professional graphics/video workstation, the Mac Pro. In the same article, Wilcox refers to some data provided to him by NPD.

“Stated differently: Nine out of 10 premium PCs purchased from US retail brick-and-mortar stores or online sites (including major chains and Apple Store) during fourth quarter was a Mac. The data isn’t good for Microsoft’s Windows PC partners. Microsoft and OEMs touted more feature-rich Windows 7 PCs for the holidays. Additionally, ahead of Windows 7’s launch, Microsoft spent six months marketing premium Windows PCs during its “Laptop Hunters” campaign. These marketing efforts apparently failed. Apple doesn’t just own the premium market, its sales are increasing there.”

While that is good news for Apple’s margins and bad news for HP/Dell, the article warned that almost all PC growth is in the under $1000 price segment.

This graphic highlights that Apple now has products at every price point under $1000, the very segment that is growing. Previously, Apple was a non player in this market.

Going back in time, let’s modify the graphic to amplify the gaps Apple had before the iPad

While Apple still had the low end Smartphone/Smart Portable Device market completely covered, there was massive area under $1000 not represented by an Apple mobile product. This was the prime retail area that netbooks and cheaper Windows laptops had been occupying.

Going even further back in time, to see how far Apple has come, let’s look at the same image modified for pre- iPhone in June 2007

The lineup started with iPods,  some with limited gaming and PDA functionality. Next were MacBooks starting at $1199, and MacBook Pros at $1999.

In 2.5 years, Apple has taken the iPod line from single function devices to best-in-class portable Smart Devices. They’ve added world class Smartphones and become a market leader in SmartPhone revenue. Apple has dropped their prices on all of their premium laptops by nearly 25%. With their most recent product launch of the iPad, Apple has introduced a new class of device to compete at a price point which they were previously unable to touch.

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