The Business World

Was Apple’s pricing strategy for the new iPad the most efficient one? Or was it a big error that they made?

The tablet market is a market that has been booming over the recent years and still probably has some margin for growth over the next few years. Since the beginning of the tablet times Apple has been, with its iPad, leading the market, which in general allow them to price their product. However there are more and more companies coming in the market with their tablets and stealing little bits of market share from Apple. This is why Apple’s pricing strategy is confusing: why is the price for the iPad so high compared to other brands (about twice as high) when they could make the price lower and close the market?

The reason for this is that Apple promotes itself as a premium brand, which is a brand with high quality products at high prices. Therefore all their products are priced really high, this would fail with most business but not Apple for the reason that Apple believes that its customer will always follow the bandwagon and therefore keep on buying Apple products regardless of the price. But, if the price was lower, they would kill the competition, create barriers and not lose market shares to small brands.

In conclusion I would say that i both agree and disagree that Apple made a mistake with pricing because they will always make profits but they missed out on an occasion to close off the market.

Article: http://www.businessweek.com/videos/2013-10-23/did-apple-make-a-huge-error-on-ipad-pricing