Is The iPad Price Really That Cheap?

With Steve Jobs revealing the iPad this morning in San Francisco, attention has turned to the various specs for the product, with one area of interest being price.

The iPad is priced in a number of different arrangements. 16GB WiFi only is $499, 32GB WiFI only is $599 and the 64GB WiFi only comes in at $699. If you want 3G access, you’re looking at 16GB WiFi & 3G: $629, 32GB WiFi & 3G: $729, and 64GB WiFi & 3G: $829. On top of that you pay extra for the 3G: 250mb for $14.99 or unlimited data for $29.99/ mth.

No doubt many a dueling over the iPad, but when Apple claims that it’s priced to sell, is the price right?

Apple argues that the iPad, “you get all our latest innovations. And all our most advanced technologies. In one of the most revolutionary products we’ve ever created. All at a price that’s well within reach.”

Sure, $499 for the base model might be “in reach,” but when Apple itself pitches the product against netbooks, just how affordable is it?

It’s an Apple and Oranges comparison (pardon the pun,) but when you look at some basic netbooks, the iPad doesn’t sound quite as affordable. A 10.1″ Toshiba with quicker processor, 160gb hard drive and more clocks in at $306. A 9.1″ Asus again with better specs (be it not touch screen) but with similar battery life and weight to the iPad clocks in at $448. Neither are as sexy as the iPad, but this is what the Apple tablet is up against.

But all that is before you get to the 3G models, which are the more appealing version of the iPad. 3G dongles for a laptop are a giveaway product, but you pay more for 3G in the iPad then you pay again for access in a market where you can get a netbook for $0 upfront if you commit to a 3G plan (least you can in Australia, I’ll presume the same for the United States.) If the iPad is targeting a mobile savvy market, it’s starting to look even more expensive. The big mystery is why the iPad isn’t being offered by a telco in a subsidized bundle; this was the key to the success of the iPhone (which you can get on a plan outside the United States for $0, in the US it’s $199.) Remember that the iPad isn’t really a true laptop replacement, and you can pick up a Macbook in the United States for $999, or 13″ Macbook Pro for $1199. Given you can get 3G on one of those for about the same monthly price as the iPad is offering, you’re talking a full blown, open machine for a couple of hundred more.

The other way to consider the iPad price is to put it against the Kindle, and although consensus says it’s not a Kindle killer, Jobs did highlight a new book buying application. Apples and oranges again, and the iPad does so much more, but at $259 for a base Kindle with free 3G vs $629 for a base iPad with 3G + a monthly 3G access cost, if you’re price sensitive and want a device to read books, Kindle wins hands down.

I’m not suggesting that the iPad won’t sell: the millions of Apple fanboys out there will guarantee that the iPad sells well from day one, but the price points are such that it’s hard to believe that this is going to be a break out, huge, market changing hit for Apple like the iPhone was. Unless it’s bundled or the price eventually drops, the iPad will never be the next big thing for Apple because costs just that little bit too much for what it’s offering.