Media marketplace
It must be stressed that Apple won't actually make up to 150% profit on each iPad sold as you have to account for cost of sale, fixed overheads, R&D, marketing, etc. But it is still looking at the kind of margins other OEMs can only dream of. The smart ones will not only price their tablets more competitively, but communicate that fact to the market.
This creates the possibility that Apple will drop the price of the iPad in the not too distant future, as the real money for Apple is expected to come, not from hardware margin, but Apple's cut of the products and services people will access via the iPad.
Just as the iPod has iTunes and the iPhone, the app store, Apple is expected to develop a special marketplace for accessing the kind of products considered to be best consumed on a tablet - primarily media.
So we're already seeing deals developing with newspaper, magazine and book publishers, and the inconvenience they're creating for Apple's new competitors. Additionally, the FT is reporting today that Apple has managed to get some US TV networks to sell their shows for a dollar a pop - half the current price - on iTunes, to coincide with the public availability of the iPad in April. Maybe the ill-fated AppleTV will get a new lease of life.
Another recent story - this time on BNET - has Bill Gates saying ‘meh' to the iPad, unsurprisingly. "You know, I'm a big believer in touch and digital reading, but I still think that some mixture of voice, the pen and a real keyboard - in other words a netbook - will be the mainstream on that," said the Microsoft founder and philanthropist.
"So, it's not like I sit there and feel the same way I did with iPhone where I say, ‘Oh my God, Microsoft didn't aim high enough.' It's a nice reader, but there's nothing on the iPad I look at and say, ‘Oh, I wish Microsoft had done it.'"
