Justified

Back when the iPad mini debuted, many people criticized the device’s $329 price tag (for the base model), saying that it was too expensive compared to other tablets of similar size that were on the market. I thought the same thing, until I pulled back a bit and looked at the mini from a longer-term perspective.

See, for most companies, they can get along fairly decently creating products for the right now, adjusting their products, pricing, and features according to market whims. It’s a way of interfacing with the market that has always seemed reactionary to me. Look at what the public is slathering over and give it to them, riding the wave until the notoriously fickle populous decides they want something else. Alternatively, you can just create a smattering of different products with arbitrary and marginal variations, designed to cater to fractionally different subsets of popular culture, and hope that people gravitate towards one product or another, or perhaps just make them enough money to offset the cost of developing, manufacturing, and marketing who knows how many different iterations of a given product.

For Apple, however, the view is longer. The timeline extends 5–10 years out, and is driven internally by the desire to deliver really incredible products into peoples’ hands. That places the locus of control squarely inside the company, instead of vesting that power in the whims of a population that worships reality TV and Hollywood drama. As such, Apple looks at supply chains and forecasts their production costs far further ahead than most companies do, and is thus able to deliver better products over time than their competitors because they’ve had the wherewithal to cultivate and maintain a stable, consistent base (referring simultaneously to supply, production, and consumption). Thus, while the $329 price point may not have made sense for the iPad mini given the original permutation of components, an iPad mini with a Retina screen, which will undoubtedly cost more to manufacture, can still provide Apple with healthy margins since Apple has already been able to account for the decrease in price of Retina displays over time and has been able to invest in battery research to drive the new displays. That, in concert with the other inevitable improvements that Apple has made to the hardware and software of its new iOS devices, will allow Apple to manufacture a better product while still maintaining margins and trying to keep investors happy (a notoriously difficult thing to do). From one angle, it’s very difficult to see the justification for that price point. But, given time, it becomes clear that Apple never priced the iPad mini for the market when it was introduced, it was looking many years down the line.

If that’s what they can do for pricing when looking forward, imagine what they’ll be doing for products.

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The Times, They Are A-Changin

WallThe news that the New York Times is finally enforcing their paywall was anticipated, but is being met with frowns and “thumbs down” reactions from folks all around. The whole thing seems really ridiculous, and far too complicated, as Gruber points out. NYT really botched this whole thing, and it just shows how far away their head is from reality.

This reminds me of an interesting article I saw the other day on electronista. As discussed ad nauseum all over the web, the publishing industry is staring a radical paradigm shift in the face in much the same way the software industry did when iOS rolled around and shook things up. The old paradigm of high-dollar subscriptions and stacks of paper is out the door. People can find all they want with just a few searches on the internet, and they can get most, if not all, of this information for free. Why would someone want to fork over just a tad under the cost of a new iPad in order to read a feature-poor version of their print edition?

We see Apple, once again, looking a ways out and realizing that the New Publishers are going to start jumping all over this in the same way the new developers jumped all over developing for iOS. Their new subscriptions are a gift to New Publishing, telling all those folks out there with good ideas to get crackin,’ and then there’s this, which is basically a gift to every indie developer and writer out there:

The template is also expected to simplify in-app issue and subscription purchases, and, theoretically, foster magazine development. ” Imagine a guy drawing and writing a comic book,” a source says. “He can’t sell it to Marvel or DC so he hooks up with a programmer and within days, he’s getting his comic book published and sold on iTunes.”

This is New Publishing, folks. How much will this guy charge for his work? Twenty dollars? Too much. Ten Dollars? Maybe. Five dollars? Probably. A fiver and you’re reading some fun stuff. When he decides to serialize it, he’s putting subscriptions out there for $10/year, maybe even less depending on how he feels. Maybe it’s only eight for the year, and for an extra two bucks as an in-app purchase you get a special background delivered to your app every week. This guy doesn’t have to break his back to deliver a stellar background to you every week, in fact he loves to do it.

Same goes for the writer who’s got the good ideas and is pushing the boundaries of where industries might be headed, or the gal who can shot photos like it’s nobody’s business. All these people want to put their good stuff out there, they know how they want it to look, and they’re going to do it.

The first lap is just a warm up; it’s the second lap that counts. We were all there when New Publishing came through the gates, and we joined that parade.

Sadly, it looks like NYT is pricing themselves right back into 2001. It was a good run, guys, but I’m looking to go the distance.