February 19, 2012, 7:08 AM —
Rumor has it the iPad 3 will soon be here. The device will most likely be a tremendous success simply by virtue of being an iPad, but if Apple wants to put some of its $100 billion hoard to use and get "creative" with the pricing of its tablets it could virtually assure its dominance and force many competitors to abandon the market completely.
The iPad has started out at the 16GB Wi-Fi only model for $499 since it originally launched. When the iPad 2 came along, Apple continued selling it at the same original iPad pricing, and slashed the price of the original iPad models to clear out inventory.
Apple adopted a similar, but more aggressive strategy with the iPhone. It is selling the iPhone 4S at the same prices as it previously sold the iPhone 4, but rather than wiping out the iPhone 4 inventory, it is continuing to sell the previous model at a discount as a more economical alternative. In fact, with the iPhone Apple is even still producing the older iPhone 3GS, which is being offered by AT&T for free with a two-year contract.
What if Apple chooses to do something similar with the iPad? What if the iPad 3 is made available at current iPad 2 pricing, but Apple also continues to sell the iPad 2 for $300 instead of $500? How many people would buy a Galaxy Tab, BlackBery PlayBook, or Motorola Xoom for $300 or $400 if they could buy an iPad 2 for $300?