What will Apple's Big Tablet cost?
- — 27 July, 2009 10:49
If Apple doesn't introduce a tablet computer soon, we'll all be sorely disappointed. With all the ongoing speculation about the alleged iPod-on-steroids, I feel like the device is already here.
Today's scuttlebutt from Apple Insider has the Big Tablet arriving early next year, a prediction that matches one two months ago by Piper Jaffray analyst Gene Munster.
So what do we know about the tablet? Reports say it's an iPod-like device with a 10-inch screen, a handheld slate that's large enough for HD movies, video gaming, and Web browsing without all the window-resizing and screen-tapping calisthenics that smartphone users endure. Apple Insider says the tablet will feature 3G broadband, which seems logical. And since we're speculating here, I'd like to request Wi-fi, Bluetooth, and GPS as well.
Name Your Price
Specs aside, what should Apple charge for the Big Tablet? Some reports say $800 is likely, but that seems high for a consumer electronics device. My prediction: $499. Here's why:
According to a 2007 study by the Consumer Electronics Association (CEA), the average American household spends about $1200 annually on electronics products. Would the typical household blow two-thirds of its tech budget on one handheld device? Probably not.
And that CEA study was two years ago -- before the current recession and consumers' belt-tightening ways. To me, $500 seems like the sweet spot for a premium consumer gadget.
And then there's Apple's product lineup. Currently, there's a big gulf between the 32GB iPod touch ($399) and the $999 MacBook. Let's assume Apple drops the iPod touch price, as it did recently with some of its MacBooks. The Big Tablet would fill the void nicely at $499.
Of course, for Apple to achieve its desired profit margin, that $500 price tag may include a 3G service contract with a major wireless carrier. Given the enormous success of the iPhone, it wouldn't be surprising if AT&T, Sprint, or Verizon would be willing to subsidize the tablet's cost to sign up new subscribers. Netbooks with wireless-style plans are becoming increasing common, so the subsidized model for consumer hardware is already in place.
And, no, I didn't call the Big Tablet a netbook. Apple would hate that.
Contact Jeff Bertolucci via Twitter (@jbertolucci) or at jbertolucci.blogspot.com.
Comments
Anonymous
1
I was going to write how wrong you were about the price point until I read your last sentence. Their iPhone 16GB is 599.00 before 2year contract agreement. I think their larger iPhone 4GT will be 799.00 before 2 year contract making the initial investment from the consumer 499.00.
Anonymous
2
Remember, Apple makes the full 799 per device.
The wireless carrier pays the 300 to Apple.
Anonymous
3
Can you image the profit from 10 million units at 800 bucks a piece? With a cost of only 300? $5,000,000,000