$499 for Apple’s iPad: Bargain or Deception?

January 27, 2010 By Nick Mokey

Is Apple’s iPad pricing truly a breakthrough, or smoke and mirrors to hide the cost most of us will really have to pay?

With analysts and pundits alike estimating that the rumored Apple tablet would fall in the stratospheric $800 to $1,000 price range prior to launch, the $499 figure Apple slapped on screen at the unveiling certainly dropped some jaws. In fact, it looked downright reasonable for Apple. But as we learned when Apple sketched out the details, that’s only for the humble 16GB version with no 3G.

The real table of prices gets quite a bit more complicated. And expensive. Opting for 3G alone will add $129 to the price, while stepping up to 32GB will add $100, and to 64GB, another $100 still. The total price for a 64GB Apple iPad tablet with 3G: $829.

Looks like Apple learned a thing or two from Microsoft’s Xbox 360 strategy: namely, throwing out a low base price for a product nobody wants, and price gouging all the way to the bank for the features they’ll really need. Without 3G, the iPad’s portability doesn’t seem all that compelling. And charging $100 for 16GB of extra memory is downright egregious when you can buy a 16GB thumb drive for around $30.

AT&T seems to have followed the same pricing scheme on its “new” data plans: Offer the same high price for the useful version, then a deeply discounted version too severely crippled to be of any use to most people. Despite all the hyperbole from Apple over the amazing deals it has ironed out, $30 for unlimited data is exactly what existing iPhone users are already paying. Sorry, no discounts or tethering options, either, so iPhone addicts will need to shell out double for two plans. Too much? AT&T will offer a measly 250MB of data monthly for $15. So much for high-def YouTube videos, or doing much out-of-house browsing.

Compare the Apple iPad to the devices it purportedly competes with. As an e-reader, even the bottom-of-the-barrel Apple iPad stacks poorly beside the $489 Amazon Kindle DX, which costs almost the same but comes with free lifetime 3G access. As a netbook replacement, the 64GB 3G iPad for $829 still looks steep beside a netbook like the Dell Mini 10v, which you can with equip for AT&T broadband for $404 (and with a 120GB hard drive to boot). Even the Wi-Fi-only Archos 9 tablet, possibly the closest analogy to the iPad, goes for $549 and includes 60GB of memory. That makes it $150 cheaper than the 64GB Apple iPad, and it runs a full desktop operating system. None of these truly makes an apples-to-apple comparison for the unique iPad (pardon the pun), but it’s clear to us that the iPad is no exception to the Apple Tax.

The buzz over the iPad has demonstrated that consumers have room in their hearts and briefcases for a device between a smartphone and a laptop. But do they have room in their wallets?

Showing 14 comments

joe at 10:43am 16th March 2010 too bad the 3g doesn't worth with t-mobile 3g, good thing there's a wifi version only ;p
Leland Gregory Robinson at 5:23pm 29th January 2010 I agree, but I am looking at that 64GB. I'm debating 3G or no 3G?
If we tweaked up some things, we could have an awesome device for education!
Leland Gregory Robinson at 5:21pm 29th January 2010 It's prepaid. So you could have one month, stop using it, and pick up again at will.
I like it like that.
Peter at 2:22pm 28th January 2010 As a portable internet appliance for the home the Ipad operates at no additional cost (via Wi-Fi) thereby making 3G a non-issue. 16GB will satisfy 95% of the target audience who have no interest in storing dozens of gigabyte size movies. Comparing the Ipad's cost for 3G access to the Kindle DX makes little sense because the Ipad can access the vast content of the web that is largely free whereas the Kindle is limited to books that must be purchased. Likewise comparing the Ipad to the Archos 9 is a bit of a stretch because the Archos uses a relatively heavy 60 GB hard drive rather than the much lighter flash memory of the Ipad. I own an Archos 7 owner however I personally prefer my Ipod Touch since the multi-touch capabilities of the Ipod make surfing and navigation a more enjoyable experience in my opinion. For all these reasons and more I have every intention of buying the Ipad at the earliest possible moment.
Ian Bell at 9:49am 28th January 2010 Also the $499 model does not come with 3G service. Even the Kindle/Nook comes with free 3G service out of the box. Apple makes you pay an extra $15/mo.
Ian Bell at 9:48am 28th January 2010 Keep in mind that watching movies is a huge feature with the iPad. The average movie is 500MB downloaded. 16GB could go pretty quickly.
Ian Bell at 9:47am 28th January 2010 Is everyone OK paying an extra $15/mo for 3G service though? You already pay for it with your phone, why can't Apple let you use your existing ATT account?
shit happen' at 5:36am 28th January 2010 boaaaaaaaaaa
James H. at 9:09pm 27th January 2010 I've been in the market for an e-reader for the last 6 months, but hesitated because of the new crops of e-readers that would be coming out in 2010. I knew 2010 will be the year for e-readers and I probably would be debating which e-reader to get for months to come. In the end, I decided to go with the Kindle DX (global) Edition; just received it yesterday.

My main reason for going with the Kindle DX is because of its size, E-ink technology and the 3G Wireless (No Charge). I'm an IT Engineer who reads many, many certification books, PDF White Papers and the Kindle DX just fits the bill; perfect (PDF support could be a bit better, however). I look at LCD; LED screens all day long a part of my job. When I'm in my studying mode, which is often, reading my certification books on E-ink technology (now) is pure pleasure; even on the hardcover books. I just can't see doing any e-reading on the iPad or any other device that have back-lighting.

My take on Apple's new iPad is...it is awesome and a nice piece of technology. The price is in-line and it is a tremendous value for what you're getting. I was a Blackberry fan since they first came out and had every version (part of the perks of being in IT) and often told myself... "I would never buy an iPhone". In Sept 08' I found myself ditching my new 8830 World Edition BB for the 2 Gen iPhone...never looked back. It is probably my best piece technology and I have all the latest and greatest toys. (Don’t get me started)

The point is this, some people, if not many, will pay for the iPad because of it functionality, value and probably to have the latest and greatest. For some people who are strictly looking for an E-reader (Like me) and have done their research know the E-ink technology is the king technology for e-readers. It is much easier on the eyes, not to mention on the battery life. So in my opinion, to compare the iPad and Kindle (DX) is unfair, but understandable. Most people who are in the market for a Netbook or an E-reader will most likely and should include the iPad. I think the iPad will be more of a threat to netbooks (and small inexpensive laptops), than to the Kindle DX or the new Sony Daily Edition E-reader.

In short, huge fan of the new iPad, my iPhone is my best friend (will be trading it in for the 3GS; upgrade offer is coming up), but I will not be trading my new Kindle DX for the iPad; as much as the tech-side of me wants to.
jesswilson at 6:35pm 27th January 2010 Sounds like a bargain to me. I LOVE my IPhone and looks like the IPad will do everything it does and MORE.

Jess
www.online-privacy.int.tc
fluvant at 4:47pm 27th January 2010 Joe, the standards you're referring to are doubtfully the average user. I'm not a techy nor do I troll comments daily. I am simply making the statement that I think 16GB is a great amount.

I have a 16GB iPhone. I have 6127 photos, 500 songs, and over 100 applications with 3 movies. I have 4.4 GB of space remaining. Frankly, the 16GB wifi device seems extremely optimal for traveling and ebook use. 16GB will hold an immense amount.

To answer your question, I'm not joking. I'm speaking as an average technology user who doesn't require more storage. I'm likely to buy the 16GB version. I think it's perfect. My argument is simple. I support Apple's modeling, and I am one person - one person more than nobody.
Joe at 4:18pm 27th January 2010 Are you joking? 16GB is SMALL BY TODAYS STANDARDs.
fluvant at 4:01pm 27th January 2010 I think it's ridiculous that you write the $499 model is "a product nobody wants." Consider the amount of space 16GB is in terms of apps, songs, photos, and movies. 16GB is more than enough and the 3G service is more of a vanity item.
Ian Bell at 3:18pm 27th January 2010 I think $499 seems reasonable. I am just curious if it will last as a consumer device, or if people will lose interest like they did in the Wii. Content and uses will be the factors.