if it is as dumbed down as the Kindle is. The Kindle is for people who only want to consume Amazon content, and to surf the web a little. It doesn't provide anywhere near the varied experience possible on an iPad.
I bet to differ. If you go to the Ipad forum, I think you will find a fair number of folks think that their Ipad 2 is doing great for what they want. And the price point is the important issue. Not everyone is willing to pay 500 to 800 for a tablet. But if you drop it to 200 or 300, all of a sudden things look very interesting. Tablet and phone are getting into consumer electronic area (as oppose to computer/labtop etc.) where pricing is as important to some people as feature. In the Q&A section, Cook touch on the topic where I underlined the discussion. The elasticity comment seems to refer to Ipad 2 demand after they drop it from 499 to 399. And the later comment referring to education market and his comment of "marked change of demand" is quite clear. Going forward, Ipad 2 may outsell Ipad 3 in some area (may be 3rd developing country). Apple will be stupid if they don't put out a Ipad mini at 300+- price point. When Ipad family has over 50%-60% market share, Apps developers will continue to focus their development effort on Ipad. But if it get below that 50% magic number, their effort will move to Amazon Fire in addition to Ipad. Ecosystem is Apple's ticket to pseudo-monopoly, why should they give away the key to kingdom without a fight?
morningstar.com
Tim Cook - CEO: Katy we are just learning about the elasticity of demand and the $399 price point it is doing well. But I have to tell you the new iPad is on fire and we are selling them as fast as we can make them. So we will learn more over, over this quarter especially as we get through the education buying season, which looks terrific for us especially on the iPad.
Tim Cook - CEO: Sure. Toni, on iPad 2 with the change in the entry price to $399, we are actually thrilled with the results that we've seen – although as Peter said, it's only been a few weeks and so it's too early to make a – come to the clear conclusion. But from what we are seeing, this unlocked some education demand that is probably more price sensitive customer. Also in several other countries, there was a marked change in demand at that price point. So, on the early going, we feel great about it. But I'd also point out that the new iPad was supply constrained last quarter for the full three weeks or so it was shipping and is actually still constrained. So the mix of the new iPad to the iPad 2, we are not certain of what that is you have, but we are certain with what we've seen so far that the absolute sales of iPad 2 at least in the early going is very exciting. On the iPhone, we continue to be very happy with the moves that we made in pricing just a few months ago on the iPhone 3GS and the iPhone 4, and both of them contributed to our ability to achieve $35 million in sales which is our second highest quarter of all times. |
