Thursday, December 1, 2011

Apple TV rumors persist, but talk of overpriced sets may miss Apple's pricing trends (think 'iPad', not 'MacPro')

There continues to be a lot of talk about Apple introducing its own TV line. A recent post at a less than reliable website talked about a release in time for the 2012 holiday shopping season.

The talk is that Apple would come in with their sets at a very high price. OK, fine, since it is all speculation I suppose that is a legitimate point of view. Apple products do, in fact, remain on the upper end of the pricing scale.

But Apple products also remain on the upper end of the quality scale, as well, generally justifying a pricing premium (although haters of Apple would argue with this, of course). I recently was with my college age daughter in an Apple store showing her a MacBook Air, a possible computer choice when she is ready to ditch her Vaio. What impressed her most was not the OS, or its size, it was its weight and unibody design. Frankly, when it comes to quality...

But does that mean that Apple will charge an arm and a leg for an Apple TV? I don't think so.

There are two things that point to a more competitive pricing strategy: 1) Apple is buying displays in huge numbers and driving down its supply costs; and 2) the iPad's pricing shows that it can compete on price (it has taken a year and half for someone to under cut Apple's iPad pricing, though to do it they have had to cut corners).

I would agree that Apple will demand that it's TV be profitable and that it would be on the upper end of the scale. But to price a new TV line at double the going rate would be a recipe for failure, as well as something that goes counter to recent launches.