Rumor: iPad 3 to see 16% price increase? We think not

Rumors surrounding Apple’s hotly-anticipated iPad 3 have surfaced around the internet today. Chinese microblogging site Sina Weibo (via Macrumors) unearthed a potential pricing sheet for Apple’s upcoming tablet, which brought with it a bit of a surprise when it comes to price.

According to the post, the iPad 2 will retain the price points it currently carries in stores, with the WiFi model starting at the customary $499. The iPad 3 will see an $80 (16%) price increase, with an entry-level price point of $579.

While the rumored innards of the iPad 3 certainly could warrant a price increase, there are a few things that don’t quite add up. The first irregularity comes from the image itself, though it is admittedly the most questionable of the arguments I’ll give. There is a rhyme and reason to every marketing move Apple makes. While a price increase certainly could be plausible, you would expect Apple’s price structure to follow some sort of logical pattern, and that pattern would be applied consistently throughout. On the WiFi side of the pricing structure, the prices go up by $80, rather than the $70 increase in the 3G model. While this discrepancy may be subtle at best, it plants a seed of doubt that can’t be ignored.

Second, just yesterday, Best Buy slashed the price of the iPad 2 by $50 to an entry-level price point of $449. Apple’s products seldom go on sale anywhere, and a sale price at $50 below MSRP generally means that Best Buy is signaling a price drop is imminent on the iPad 2. Sure, we may not see the iPad 2 price drop to the $399 the original iPad sold for after the iPad 2 went on sale, but the price drop would certainly suggest that the iPad 3 will likely enter the market at Apple’s sweet-spot $499 price point. We think this is more than just an inventory reduction to make room for the iPad 3, and this price reduction just adds fuel to an already burning fire.

Finally, tablet prices are trending downwards, not upwards. Though the Kindle Fire is certainly not the most powerful of the tablets out there, it has sold over 5 million units because people aren’t yet expecting tablet computers to replace their laptops, and the $199 price point makes the purchasing decision a no-brainer. ASUS and nVidia are about to release the MeMO 370T, a 7″ slate that will bring nVidia’s quad-core system on a chip processor for the super-low price of $250.

While none of these are conclusive arguments for a $499 price point, they certainly add up to something not feeling quite right for me. As with all rumors, take it with a grain of salt as you wait for Apple to officially unveil the iPad 3 next week.


[Via MacRumors]

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  • Anonymous

    I certainly wouldn’t think that Apple would be raising tablet prices with its enormous economies of scale.  In theory, the more iPads they build, the less expensive it should become for Apple.  Apple surely must have paid off all the R&D by now considering how big a hit iPad 1 and iPad 2 was.  It really doesn’t follow Apple’s usual pricing structure to start raising prices like that.

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