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.”
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.