Taking a page from the old fairy tale, an analyst said Apple’s tablet could hit it out of the park if it picks a price that is just right – say $600. If Apple comes up with a price neither too high nor a niche product, Apple could sell 5 million tablets, bringing in $2.8 billion its first year.
“Pricing is key,” according to RBC Capital Markets analyst Mike Abramsky. The analyst told investors the best case scenario is the tablet threads the middle, avoiding both the crunch of record demand (like the iPhone), and being labeled a niche product (like the MacBook Air).
If Apple prices its tablet at $1,000, demand shrinks, requiring the company to draft carrier-subsidies and wide distribution akin to the iPhone. However, at $500 to $799 (or $200 to $300 subsidized), “significant demand exists” and the device “strikes squarely at hear of the entry level laptop and Netbook markets,” Abramsky said.
The analyst also estimates a tablet could grab two to five percent of the Mac or iPod touch sales, but the impact could be minimized if the new device doesn’t include Mac OS X compatibility or Windows emulation. The tablet could use the iPhone OS, according to reports.
Abramsky’s comments appear in line with other experts. Consumers are unwilling to pay more than $700 for a tablet, a research firm announced Friday. Seven in 10 people surveyed by Retrovo said they would not spend more than that amount. ChangeWave Research also found 70 percent of people willing to pay $500 for a tablet, with only 37 percent saying they would pay more than $700. Earlier this month, the Wall Street Journal reported the tablet could cost $1,000.
[Via All Things Digital, CNET]
