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WSJ BlogsBy Matt Phillips
Bloomberg News
Apple intends to stay “nimble” on pricing of the iPad, possibly lowering prices if the newly unveiled tablet device fails to gain traction among consumers.
That was just one of the items in a note out Sunday night from Credit Suisse recounting meetings with Apple executives. Perhaps unsurprisingly, the Apple officials who met with CS analyst Bill Shope seemed to downplay the potential for some cannibalization of other Apple lines, which analysts have noted.
Apple wants the iPad to be the best device for a few key use cases. For instance, the company believes it could eventually be seen as superior to both handheld and notebook devices for browsing the Internet, using the App Store, and consuming mobile media (video, photos, and e-books). Nevertheless, in other areas, notebooks, the iPhone, or an iPod may be more appropriate. This clear segmentation of capabilities suggests that cannibalization may be less of a concern than most currently believe.
Shope also wrote that despite the seemingly aggressive pricing of the iPad — the lower-than-expected price points range from $499 to $829 — Apple seemed to indicate it would respond with price cuts if demand for the device wasn’t revving up the way it liked. “While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),” Shope wrote.
Apple shares are up about 0.5%. On the year, they’re down a bit less than 7%. And since the iPad was introduced on Jan. 27, shares are down about 5.5%.
Cheers..!
