Original iPad attractive on price fall
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Unique model
In the gray smuggler's market, where items can be bought and no taxes paid, the price of an iPad is just 2,500 yuan.
In southern China, China Mobile has sent messages to users offering them free iPads and wireless data cards if they agree to pay 4,000 yuan as a prepaid telecommunications fee.
So far, it's only Apple that trumps on price, thanks to its unique business model and its dominant marketing position. Its competitors in tablets cannot beat or even match it.
Primarily, Apple can form strategic partnerships with other companies to buy large supplies of components at a lower price, thanks to its leading market position with huge volumes and rich cash reserves.
Secondly, Apple uses self-developed chips like A4 and A5 processors, which help the iconic company save on purchases from external chip manufacturers.
Finally, Apple can subsidize some of the cost of building iPads with the money it makes through its App Store, which generates more than US$1 billion a year.
At present, App Store is the world's No. 1 online application store, without any real rivals except Google's Android Market.
Meanwhile, Apple is expanding its App Store business by introducing magazine and newspaper subscription services and mobile advertising platforms, which will help Apple gain more revenue-sharing income from online stores. Put another way, the strategy will offer Apple more room to rely on hardware income to cut prices.
That may be the reason why Steve Jobs, Apple's chief executive, said, "Most of these tablets are not even catching up to our first iPad."
Even one considers the iPad 2 equipped with cameras, it's also competitive, costing US$499 - US$300 cheaper than Motorola's Xoom.
In my personal view, iPad 2 may not be attractive to many Chinese consumers.
With new functions of cameras and the video communications tool FaceTime, I think the iPad2's functions may be just cosmetic.
FaceTime is already a built-in function in the iPhone 4. I have seen few of my friends who own the iPhone 4 using that function. For me, I just used it twice to talk with another reporter for product testing.
FaceTime requires Wi-Fi, which is not so widely accessible compared with mobile signals in China.
Another reason is cultural. From my experience, Chinese people don't like face-to-face calls, considering them a breach of privacy.
Last but not least, the iPad 2 has no timetable for a debut in China. Therefore, it's a good time for people to buy an original iPad. Actually, two of my friends bought iPads in the past week, taking advantage of the lower price.
But then again, none of us has handled a new iPad 2. Maybe we will be hooked once iPad 2 is in our hands. Who knows?
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