by raneko
Could Bundled Deals Set The iPad Free?
[Via Xeni @ Blogging.la]
The low-end iPad has a retail price of $499 and a materials and manufacturing cost of about $229, according to iSuppli.
Clearly, Apple has plenty of room to be flexible on pricing, just as it did with the iPhone, which started at $599 and is now $199.
Apple plans to take a 30% cut on any media that is bought by iPad users through its online store.
That means Apple could sell the iPad for $100 and still profit from all the media it can sell over the lifetime of the iPad.
But what is more likely is a situation where Apple can sell the Pad for $100 to publishers and then they can offer it for free as part of a subscription deal.
For example, Ryan Tate over at Gawker, reports that the New York Times is considering charging as much as $30 per month for a subscription to the iPad version of the newspaper.
At that price, the New York Times would have enough margin to offer a ‘free’ iPad with an annual subscription. Especially since it can charge advertisers higher rates for the richer ads it can deliver on the iPad.
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If this happened, it could change the face of media. It would be as big a revolution as the original Mac.
Would Apple do this? It would be a really innovative marketing scheme, opening up iPad purchases to people who might never have thought about getting them. And, it might actually work for the publishers, particularly if they banded together so that a free iPad could be had for getting a bulk subscription to many content providers. especially if they worked a little to make the iPad content rally nice. Take a look at Wired’s idea.
Bundle things like the NYT, Wired, Sports Illustrated, etc. into one price to get a free iPad. Make it like cable or satellite TV. If you get the bigger package, you get a better iPad. Essentially, Apple then sells the ‘cable-ready’ boxes for these media companies.
And why stop at print, Include Hulu and other digital video. They all get a piece of the subscription pie. Now we get Apple not only as the set-top box maker but the ‘cable’ company itself. What kind of business model is this then?
Would I pay a monthly subscription fee to get a free iPad? Well, I pay a fee now for satellite TV that gives me a free DVR. Why not one that gives me a free iPad?
And, as time goes on, this new media device and market could become as large as the cable system, providing media (music, news, print, movies, TV) that simply are not available any other ways.
Maybe this is why cable channels are trying to buy media companies and content creators? That would give them a hook into this new revenue stream. Instead of just seeing it as a competitor.
Of course, this also indicates that Apple TV might be incorporated into this whole process, making it the set-top box while the iPad is the mobile box.
An interesting hypothesis. We shall see.
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