The tablet market is being affected by today’s fragile economy. Many products are reducing their prices, such as HP TouchPad, BlackBerry PlayBook, HTC Flyer, etc. Some are even sold at more than 50% of their original price to attract customers.
The fact that iPad is missing from this price war is probably not surprising to the public since “Apple is famous for sticking to its price guns”.
(Samsung Galaxy Tab 7.7)
What holds Apple well on top of the chart is that it is able to play its differentiation strategies well. Apple products are known for its innovation and distinctiveness. In other words, high pricing actually becomes a selling point; as soon as iPads begin to drop their price, they lose the value of being “high-class” and would be forced to enter the price war (i.e. iPhone 3GS). Will Apple still hold the values when its products are forced to reduce prices in the future? After all, customers like to see what they bought today are still worth the same in the future. A practical comparison would be buying a car. The minute you sign the contract, your car will lose a couple thousand dollars in its worth.