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Tuesday, November 15, 2011

Will iPad get priced out of the holidays?

Keep an eye on those iPad sales in the fourth quarter as ever encroaching tablet competitors converge at more than half the price, according to a Motley Fool-MSNBC report.

Goldman Sachs analyst Bill Shope is advising his clients to watch those iPad sales and thinks Apple is long overdue for a price cut for the market-dominant device.

The field of lower-priced contenders for this season's holiday shoppers include: Amazon.com's new 7-inch Kindle Fire priced at $199; Barnes & Noble's Nook Tablet that lands stores in two days at $50 more than the Fire; and a host of cheap non-Android tablets by the likes of Hewlett-Packard and Research In Motion, among others.

The Motley Fool ponders whether prospective table consumers care enough about iPad's 3G capability for up to three times the price of the Kindle Fire, and Apple thinks its doesn't need to compromise on the pricing of its market-leading device.

"Don't go there. When a fight boils down to the greedy vs. the hungry, bet on the ones with the grumbling stomachs," the article says.

"Apple had no problem selling $500 to $830 iPads when all of the major manufacturers were in that ballpark, but there's a new line in the pricing sand. If Apple's response is to simply roll out a seven-inch iPad early next year at $299 -- and perhaps shave its flagship design by $100 each -- that may be enough to at least keep it in contention. Either way, it's time to kiss Apple's healthy iPad profit margins goodbye, the Motley Fool said.

For the full Motley Fool-MSNBC story: www.msnbc.msn.com