After the announcement of iPad in 2010, I wrote on Adaptive Path’s blog about “Apple’s iPad and the importance of price.” I noted how the success of Palm Pilot was in part because it had a target price of less than $300, and that Steve Jobs undoubtedly had done the same with $500. It helped explain some curious decisions about the product, like how it didn’t have a camera, even though it had the a space for it in the design, and iPhone, which had been out for 3 years had a camera. (And a camera appeared in the next generation iPad.)
There was no official commentary about the $500 price point and what had to be sacrificed in order to get there. Apple never made mention of it as a target — just that that’s what it would cost.
Today we get an interview with Phil Schiller in The New York Times that affirms what I suspected:
The project started being about, “O.K., what is a future computer device that can be under $500, that is something we’d be proud of, that has Apple quality and an experience we’d love?†Very quickly, the team and Steve came to, “Well, if we’re going to get to a price point like that, we need to remove things aggressively.â€
So, please excuse me while I pat myself on the back. It’s gratifying to have sussed out a key component of Apple’s product strategy, especially when no one else seemed to realize it.
