Monday, November 16, 2009

iTablet Cost Speculation

Just how much will the Apple iTablet cost?  Alright, here's is what we think we know.  And then we'll get into some more speculations.  Remember, these are speculations based on what I've seen about Apple's moves and tactics from the past.

  • It should be available in the first quarter of 2010.  
  • It should have very good battery life (or else, what's the point?)
  • It should do everything.  "Everything" being relative.  
  • It should have a 10"-ish screen.  
  • It should be touch only.  A recent patent uncovered pen input and Apple does own a whole host of input patents with pens from the Newton days.
  • It should spark a whole new segment of mobile computing.
  • It should require a data plan thought not necessarily the case.But there will likely be an unlocked standalone version as well.
  • It should serve as a companion to the Macbook people already have.  It will not replace the low-end Macbook.
  • It should have a serious focus on education.  I know people talk about Jobs saving the print media but education is where it all starts. Don't you agree?
  • It should make iTunes even more indispensible.
  • It should be a global launch but international markets will miss important features until other media pieces are in place.
  • It should highlight gaming, reading, and creativity.  Ain't about voice and surfing the Web no more.

Did I miss anything else?  I'm sure I did but I'm also certain this will be updated between now and January as more information becomes available.

So, you're asking about cost.  Well, this is the part that is all guessing on my part.  And your wallet ain't gonna like it one bit especially if you're not into getting a subsidized wireless plan.

To soften the blow, I can tell you this.  It'll be unlimited.  If it's not, it won't fly.  Why get a "unlimited" wireless 3G plan from ATT with an artificial cap of 5GB.  Doesn't make sense no how.  But to make things easier, this ATT scheme will include Wi-Fi access via its thousands of hotspots.  Plus, in areas where there aren't ATT-supported hotspots, maybe Google, Microsoft, and Yahoo will fill in the void.

Now, cost.

  • A lot. $$$$$$$.
  • Estimated cost for Apple to make the iTablet will be around $500.  With a 35% operating margin that Apple likes to maintain, we're looking at paying at $800.  This is in the right ball park of what a lot of analysts (who I don't care for) and bloggers (best folks I know, aside from readers) are indicating.  We might see a $900 version depending on the size of the onbord memory.
  • Estimated cost of a smaller version to be $400.  With the same 35% margin, we might be looking at $700 to round out the number.  
  • Estimated memory will be 32-64GB.  Folks will go bonkers about the small size but I hold out hope that Apple will offer SD card slots since they offer them in the Macbooks.  That's assuming design and aesthetics allow for it.  The price difference will be $100.  
  • Subsidized versions should know $300-$400 off the MSRP.  For a two-year wireless deal with ATT (which everyone assumes will be the US carrier of choice), the initial out the door cost will be $400-$500.
  • Cost of wireless data.  I'm gonna go with $60.  Perhaps $70 or $75.  Keep in mind that ATT will be offering no voice plan at all.  And insteady, users will require a VOIP solution of their own but it's likely Apple and ATT will step in to fill this void.  After all, even Google Voice doesn't offer a full-featured VOIP solution at this time (Google bought out Gizmo5 last week).
  • Apple had patented a scheme that lets advertisers offset costs.  It's very unable so I don't think we'll see it in the way we think.  It'll likely be tied to media or print products.  Don't look for advertisers to know off $100 off the iTablet or anything like that.

So, that's how I think it'll go down.  There's a lot of assumption going on here.  This reminds me of the iPhone speculations prior its actual introduction.  Of course, we're assuming there is even an iTablet at all.

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