A $1000 Apple Tablet? Let's Hope Not
So how 'bout that Apple tablet? Cupertino's mysterious slate computer--which officially doesn't exist--retained its rumor du jour status Wednesday when Oppenheimer analyst Yair Reiner predicted the device would debut in March or April 2010. Reiner's prophecy calls for a tablet with a 10.1-inch LCD display and an average sale price of $1,000.
Wow. If Reiner's prediction is accurate, the Apple device seems wildly overpriced for the consumer market. With smartphones hovering in the $200 range (with a two-year wireless plan), e-readers such as the Amazon Kindle and Sony Reader priced at $259, netbooks under $400, full-size laptops near $600, and MacBooks starting at a grand, a $1000 Apple tablet would seem an exotic luxury built for the privileged few. It would certainly draw crowds at the Apple Store, but few shoppers would buy one.
The tablet, if the rumors are true, will be a combo e-reader, media player, and Web browser. It will fill the void between smartphones, Kindle-class readers, and netbooks/laptops. And given Apple's legendary penchant for innovation, the tablet will likely surprise us with some clever tricks all its own.
But the coolness factor can only carry a gadget so far. Unlike the iPod or iPhone, the tablet isn't entering an established market; rather, it's forging a new one. Some see the tablet as a high-end version of the Amazon Kindle, but it sounds like a lot more. Today's e-readers are really good for just one thing: reading books. Their non-backlit, grayscale displays don't do justice to magazines, newspapers, or other Web content. And e-readers are relatively cheap: $259 is an impulse buy for many consumers, but $1000 requires some serious soul-searching.
Yes, I realize that Apple has succeeded at this game before. When the iPhone debuted in 2007, critics said it would never sell at $600. It did, of course, although Apple did lop $200 off the price within a couple of months.
As PC World's Tim Moynihan pointed out to me earlier today, a high initial cost may very well be part of Apple's grand plan. The steep introductory price is designed "to squeeze every ounce of profit margin from early adopters," he wrote me via e-mail. If the initial cost is $1000, price drops will almost certainly follow over the next two generations. Apple has adopted this strategy before. Example: A newer, better version of the original $600 iPhone now costs a mere $99.
I hope that's Apple's strategy, because I can't help but feel that a $1000 tablet--without immediate price cuts--would almost certainly fail. The Kindle crowd wants a cheap ($200) device for reading books. Students need a conventional laptop for school work. And smartphone users wouldn't swap their handsets for a large, bulky slate--nor would they carry two separate mobile devices.
Then again, maybe I'm just cheap.