Apple Marketing VP Defends The Price of iPad 4: The Apple vice president of marketing, Phil Schiller, defends the price of $329 dollars for the new iPad mini, claiming that consumers are willing to pay for quality not found in cheaper devices from rivals such as Google and Amazon.
With growing competition of ‘tablets’ that are smaller and less expensive than the Apple iPads, Apple CEO, Tim Cook and Phil Schiller showed on Tuesday the new 7.9-inch device. This has most of the functions and features of the iPad, but in a “Package” smaller.
While the news release was welcomed by Wall Street, many analysts worry that the higher than expected price may be rejected by some consumers.
The ‘tablets’ Nexus 7 Google and Amazon Kindle Fire HD are both priced from $199. Although the iPad is much more expensive mini is also lighter, thinner and offers more screen space than rival bids. Schiller told Reuters he believes that consumers will see the iPad mini as a premium product that is worth paying.
“The iPad is by far the most successful product in its category. Affordable product that we have done so far was $ 399 and people have chosen on these devices,” said Schiller.
“Now you can get a device that is even more affordable at $ 329 for this new great and I think many customers will be very excited about it,” he said.
Amazon, for its part, has made inroads in the area of 7 inches with the launch of its Kindle Fire and has said his last Kindle Fire HD is the best selling product in the company’s Web site. In addition, Google also believes it will sell well its Nexus 7, manufactured by Asus.
Apple is under pressure to defend its dominant position in the ‘tablets’, a market that has created his own company with the launch of the iPad for the first time in 2010. The strength in the market was evident in the opening of the iPad mini, when Schiller took the unusual step of making a side by side comparison with the Google Nexus 7.
“Others have tried to ‘tablets’ smaller than the iPad and have failed miserably,” Schiller said during the event. “It is a great experience.”
However, analysts fear that competition with ‘tablets’ cheaper affecting profit margins of Apple. Apple’s gross margin in the iPad is between 23 percent and 32 percent of U.S. sales.
Other analysts, by contrast, are more confident. “Despite concerns about the price, we would be buyers of the stock, even against earnings this Thursday. Believe that customers will pay a premium for the ‘tablet’ of Apple,” said FBN Securities analyst, Shebly Seyrafi.