More than one analyst has taken the bold approach by saying that they think Apple needs to cut their prices in order to remain competitive and stay on top. This seems like a really wise approach given that Apple only sold 30.5 million iPhones and 13 million iPads this quarter. It may be true that initial estimates thought they may sell as many as 14 million iPads so 13 million may seem like a real disappointment… wait… what?
When the next closest competitor sells 4 million tablets, I think it’s reasonable to say that Apple’s current strategy may already be working for them.
The question that is still dangling out there however is what will happen when the iPad 3 is inevitably released in 2012. Lots of speculation has the iPad 2 going on sale prior to the launch but I am not sure this makes sense. It isn’t as if the first generation iPad went on sale prior to the delivery of the iPad 2 so what would draw this conclusion? It’s possible, and maybe even likely, that existing iPad 2 inventory could be sold off at a reduced price but that is a clearing the shelves strategy and not a price reduction in the same way they are meaning.
The more ridiculous idea in my mind is that Apple would reduce their prices in order to compete with other manufacturers who are offering their devices at a discount. Sure Amazon has their Kindle Fire selling at a much lower price than the iPad 2 (which is resulting in a loss for Amazon and not a fantastic long-term business strategy when you consider Apple’s preference for making profit –not to mention the fact that the iPad 2 isn’t just an eReader on steroids) and RIM is having a fire sale on their PlayBook tablets (which is more a gasp for air and trying to get back in the game than anything). In fact both Amazon and RIM are banking on the fact that once consumers get their hands on devices they will spend money to furnish them with apps and other content.
So what exactly is Apple doing wrong again?
[via The Motley Fool]