Some interesting data from Nielsen, showing amongst other things what was important to people buying tablets. Amid the widespread dismay that Apple’s iPad Mini is priced too high (iPad mini starts at £269 (16Gb), Nexus 7 starts at £159 (8Gb) and Amazon Kindle Fire HD starts at £159 (16Gb) also) , it seems features (57%, the top reason), app availability (55%, the 3rd reason) and design (37%, the 4th reason) were much more important than price (21%, the 7th reason).
Apple rarely compete on price alone. Value is much more Apple’s core proposition. There is so little margin at the bottom that Amazon and Google sell their tablets at razor-thin (or negative) margins, in the hope that they’ll make some small margin as the devices are used as portals to their content services. As Horace Dedui has previous commented, this does not represent an attractive business model – those margins are so low they won’t finance ongoing innovation and design excellence.
Finally, it will be much easier for Apple to reduce prices than raise them. Seems smart business to go with a price at the top of what you think the market will support, and reduce it if you were wrong. Apple did this with the original iPhone launch in fact.
So we’ll see. The iPad Mini may be priced too high, but if I were Apple I’d be doing the same thing.