When you buy a premium product, what matters?
Quality and workmanship.
When you buy a mediocre product, what matters?
Price, Price, Price!!!
Consumers want the most they can get for their money. This previous statement will always hold true. Basic economics tells us that each consumer will wish to get the most utility that their buying power allows. When it comes to the lower end of consumer electronics, price trumps capabilities time and time again. Amazon has not sold countless Kindles because they are “the best,” rather because they are the best for their price point. Many parallels can be drawn to different examples, different merchandise and different consumer fads. At the end of the day we do know that the consumer buying the low-end tablet remains financially strapped, so price takes precedence over all other measures of quality.
Did you know the iPhone subsidiary usually runs about $400?
You are likely decent at math, this means that the “cheap” iPhone cost under $200.
Apple has successfully owned the smart phone market since its inception. Anyone remotely educated can infer that this has much to do with price. The $200 price target remains an important aspect when it comes to the consumer electronics. Why do you think that both Google and Amazon have prices at or around this price point for their tablets? Now your telling me that Apple wishes to take the lower end tablet market by storm and they are not concerned with price? Does anyone else see the fallacy in their methodology? When it comes to lower end consumers, price remains one of the most important aspects. We are not talking about high-end consumer electronics where the customer doesn’t care if the price is $500 or $1000. We are talking about Christmas shoppers on a budget, pinching pennies.
What Apple has failed to realize and both Amazon and Google have figured out. These new age tech giants have come to realize that a small-sized tablet serves as a compliment to a PC, rather than a replacement. Consumers will not think twice about shoveling out hundreds of dollars when they no longer have to buy the dinosaur of a PC. When they are merely buying a device that serves to assist them in their computing needs (in addition to a PC), spending more than $200 seems like a stretch. Apple seems to be more concerned with ensuring they get their “Apple Premium” than making sure they capture the lower end of the tablet market. This could in turn cost Apple much more than they think in the coming months and years. As Apple has been synonymous with quality products, putting out a mediocre product at a steep price doesn’t bode well for their brand.
Price remains everything. I’m worried about the iPad mini being priced 30 dollars to high. Both the Nexus and Kindle Fire are decent to quality products. Though the tech heads hate on one or the other for various reasons, at the end of the day tech gurus do not drive sales. The mass consumers drive sales and at the $200 price range these consumer are very price conscious. In the coming months we will sit with bated breath, wondering if consumers are willing to pay that extra $129 for the Apple premium. In my opinion price remains the deciding factor for the low-end tablet consumer and the real fight will be between Google and Amazon.
And they say I’m A Fool… Sure.