On May 6, two months after the US launch, Chinese customers finally got to see the Apple iPad 2. The wait was much shorter than for the original iPad, which took more than five months to reach China.
Apple fans around the world have lined up to buy their beloved tablet PCs as they arrive, and many Apple stores have reported that their initial inventories sold out in just one morning. But the iPad 2 launch in China has been released with a different strategy than all other regions.
When the iPad 2 first launched in March, Apple kept the price the same as the original iPad, positioning it as “improved design, same price.” In China, however, Apple lowered the price of the iPad 2 by CNY 300 for each of the three versions sold in the country.
Furthermore, almost at the same time as the iPad 2 launch in the US, Apple dropped the price of the original iPad. In fact, the 16G/WiFi version at CNY 2,888 is cheaper than the 64G iPod Touch. Why? A comparison of tablet PC prices in the Chinese market gives us a clue.
Prices of Major Tablet PCs in China (CNY):
- Apple iPad 2 16G/WiFi (CNY 3,688)
- Apple iPad 16G/WiFi (CNY 2,888)
- Acer Iconia A500 (CNY 3,299)
- Lenovo LePad 16G/WiFi (CNY 3,499)
- Samsung Galaxy Tab P1010 7” 16G/WiFi (CNY 3,298)
With such an aggressive pricing strategy, Apple’s rivals are having a difficult time competing. The iPad already leads in customer identification of tablet PCs, and the iPad has thousands more applications than competing products. Furthermore, for the new and improved version, the price is not very high, and the old version is even cheaper.
The major brands are not the only ones suffering from Apple’s pricing strategy. In Shenzhen, small brand and white box tablet PCs sell for CNY 600-2,500 and have been selling well since the iPad sparked the tablet PC market in 2010. With the iPad as low as CNY 2,888, many customers considering a small/white brand tablet PC may re-consider if there is only a small price difference between it and an Apple iPad.
In a market where the iPad already dominates more than 75% share, Apple is applying an aggressive pricing strategy against all major parties in attempts to consolidate its market position against competitors.