iPad still holds the price advantage

When Apple CEO Steve Jobs (Steve Jobs) iPad released last January, the biggest surprise is not the product itself (a lot of people put the iPad as a "large iPhone"), but only $ 500 price.

The reason why no one expected the price, perhaps because Apple has always focused on high-end mobile market, MacBook usually the price in 1000 dollars. Perhaps because of Apple laptop battery executives have repeatedly told investors that they can not produce a "price $ 500 but not spam" products.

However, given that Apple is indeed cheap, but also did not spam iPad. iPad is still the best in their field and most popular products. At the same time, competitors are difficult to achieve low-cost 500 dollars.

Motorola Xoom Tablet PC in the U.S. market price of 800 dollars. (To be fair, with which most closely matches the iPad model sells for $ 730, but 500 dollars Xoom not prepared to launch the model, and a lack of Motorola's low-end products will be negative.) Samsung Galaxy Tab though only with a 7-inch screen However, the price is still bare metal up to 600 dollars.

Why is it so hard to achieve the low price? Apple is how to do it?

Retail Strategy

U.S. IT news site Tech Republic's Jason Messina (Jason Hiner) that largely stems from Apple's retail strategy. Apple currently has 300 retail stores, can be sold directly to users iPad. This is an advantage, because if iPad major retail outlets through a third party, there will be a large part of the profit grab by these retailers.

Apple laptop battery has with Best Buy and Wal-Mart and other retail chains launched a cooperation, but the store inventory always seems inadequate. Messina believes that the real purpose of such cooperation is likely to expand the marketing reach, not sold iPad.

"If retailers to sell products through cooperation, Apple will be hard to swallow the bitter fruit of profit. And if the user directly through Apple's retail or online store, Apple will be profitable." He said, "However, like Motorola , Hewlett-Packard and Samsung to cooperate companies are retailers must Tablet PC to get all of the wholesale profits. "

This seems reasonable retail advantages, but Messina and have neglected to open 300 retail stores by Apple to pay the high fees. Messina's theory does have merit, Apple's own stores can indeed bring significant benefits: an extension of a large range of users, and in Apple's own store, their products do not have with other vendors on the shelf competition.

Vertical integration

But when we try to crack the secrets of iPad for only $ 500, you must also be fully taken into account, not just the retail strategy.

Apple's vertical integration is the world's strongest businesses. In addition to operating its own retail network, Apple's hardware and software design are also independent, but Apple laptop battery also has its own digital content store.

Means that Apple developed intellectual property without paying license fees to third parties. For example, A4 chip technology is developed or owned by Apple technology (rather than from Intel, AMD or Nvidia). Apple also has its own operating system without having to use Microsoft's or Google's products.

Why do you think HP's acquisition of Palm to develop the TouchPad? HP want to have self-developed mobile operating system to control their own destiny in the mobile market, stop the dependence on Microsoft, which so far has not developed a convincing strategy for tablet PCs.

In the iTunes media platform, Apple will be extracted from each sale into a certain, including the App Store, iBooks, and iTunes and other digital stores. Compared to Amazon, iBooks still a long way to go, but the App Store and iTunes is the most successful in their respective areas of digital media store.

Round enterprise

In short, iPad may exceed the value of 500 dollars. U.S. market research firm iSuppli teardown analysis of only part of the iPad not fully estimate the true costs because they have not taken into account and R & D and other factors. Apple has been able to withstand such a low price, most likely because the company has a strong eco-system, but also firmly in control of every aspect of product pricing.

This will ultimately boil down to two aspects: the ecosystem and control. The reason why competitors can not achieve low-cost 500 dollars, because they can not as integrated as Apple laptop battery, including retail strategy, the digital content market, and all hardware and software engineering factors.

As Steve Jobs famously said, "Apple laptop battery is the last one in our industry all-round business," so when the competitors will encounter difficulties against the iPad.

All right reserved!

From: http://www.batterytip.info/