Was reading this article via Shawn Blanc’s post and I pondered on the reasoning behind the price and here is what I think besides Dan’s view point. The iPad mini’s price is more of a strategic price than anything else, and it does have a long term price point in mind. First the iPad mini has a bigger screen size and it needs to gel with apples product lines. At this point Apple doesn’t need to justify anything to either people or to its competition.Apple plays by its rules. With older iPod touch still around (I think its just there for holiday season sales), Apple couldn’t reduce the price of the new iPod touch below or equivalent to the older iPod touches/iPod Classic. So 5th gen iPod touch ships at a steeper $299. This Steep price point would boost sales of 4th generation iPod touches which sell at $199. So apple would be sold out of the 4th gen by the end of holiday season making it easy to discontinue in feb/march. So a relatively bigger device like iPad Mini, despite running a smaller resolution needs to be at a higher price point the smaller ones. Apple had no option but to price it at $329. There is another reason as well. Down the lane the manufacturing cost of retina ipad mini would be higher than current one, say if apple sold iPad mini at $279 this year with a margin of $50, they won’t be able to keep the margins same next year when they replace it with a retina display for the same price. The $329 would enable them to still keep their margins. While this year they might be making a little bonus on iPad mini’s margins than next year. Next year when the older iPod touches’s are discontinued, the new touch would be sold at lower price(say $249). Yeah I think ipod classic will be discontinued as well. And similarly the iPad mini when it gets the retina display next year, Apple can just keep the price margins at $329 and then they would have a product at every price point. Prices would be justified to their customers as well. Next year Apple’s line up of media devices might look like this. What do u think?
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