The Triple-Dog-Dare Pricing of the iPad Mini
Jeff is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
How many of you know the memorable flagpole scene from Jean Shepherd's "A Christmas Story"?
Flick: Are you kidding? Stick my tongue to that stupid pole? That's dumb!
Schwartz: That's 'cause you know it'll stick!
Flick: You're full of it!
Schwartz: Oh yeah?
Schwartz: Well I double-DOG-dare ya!
Ralphie as Adult: (narrating) NOW it was serious. A double-dog-dare. What else was there but a "triple dare you?" And then, the coup de grace of all dares, the sinister triple-dog-dare.
Schwartz: I TRIPLE-dog-dare ya!
Ralphie as Adult: [narrating] Schwartz created a slight breach of etiquette by skipping the triple dare and going right for the throat!
Now, jump a few miles west of Hammond, Indiana (where "A Christmas Story" takes place) to Cupertino, California, and imagine this entirely fabricated scene:
Apple Exec: Are you kidding? Price the mini at $249? That's dumb! We're pricing it at $329.00.
Reporter: But it won't sell at that price!
Apple Exec: You're full of it!
Reporter: Oh yeah?
Apple Exec: Yeah!
Reporter: Well I double-DOG-dare ya!
Reporter: I TRIPLE-dog-dare ya!
Apple (NASDAQ: AAPL) is known for the sleek lines, beautiful curves and extreme elegance of its products. But business is war and however inelegant Apple may appear, "going right for the throat" or in revenue terms, "the wallet" of its many cult-like followers is good business. But will it hurt their sales numbers?
Early evidence indicates not.
"According to a recent Nielsen study, Apple's popularity leading up to the holiday season continues a trend seen over the last couple of years, with American kids aged 6-12 generally more interested in the latest iOS offerings than other consumer electronics and gaming devices."
Many thought Nintendo's Wii U would be the hot ticket item on Christmas lists this year, but it actually has been running second (at 39%) to Apple's full-sized iPad (1st at 48%) and the iPad Mini close on its heels (3rd at 36%).
Some analysts have predicted that the Mini would be yet another of the long string of sales successes for Apple with 10 million units sold in November and December.
And now, Apple (who in my opinion, continues to have some of the best marketing messaging of any company ever) releases just in time for those last minute impulse shoppers, a tear-jerker of an ad showcasing the wonderful FaceTime tool using both the iPad and its smaller cousin Mini.
Many, many, analysts, prognosticators and Apple-envy-filled competitors continue to forecast the end of Apple. That its recent tumble will continue. That the magic is over. That it can't continue its history of invention and innovation.
I don't know. I'm not an analyst, nor do I play one on TV. I may be very late compared to the rest of you in coming to this realization, but I no longer think of Apple as a technology company or manufacturer of interesting electronic gadgetry, although indeed it is. I think Apple may instead be a company actually focused on releasing, developing and encouraging the hearts and minds of its consumers.
A Catalytic Force
There have been several in our history, and a few we can actually own.
McDonald's (NYSE: MCD) changed the way we eat. It's performance as an investment, while not a go go, sexy superstar, it continues to be what some within the Foolish Community call "the perfect long-term investment" .
Coca-Cola (NYSE: KO) changed what we drink. It's the number one recognized brand in the world and refuses to settle or rest on its laurels. In fact, Coke has set its sights even higher for the foreseeable future.
Ford (NYSE: F) changed how we travel and the entire manufacturing industry in the process with the invention of the assembly line. It remains a "top ten" investment in analysts minds even after a hundred years of success.
And then there's Apple. Apple changed how we listen to music. Changed how we use our telephones. Changed how we interact with technology. We are a society that demands to be entertained ALL THE TIME. And that entertainment comes in a variety of forms. Some of us find joy in reading investment opinion (as well as writing some). Some watch movies 24/7. Some play games. Some surf the net. Some read books... although no longer as ink on paper. The explosion of tablet usage is a trend that will continue. While the smaller sized tablets initially lost traction to the 10-inchers, smaller appears to becoming sexy again.
And now there's this Apple TV thing. Smart TV, like the smart phone will change the worlds of both business and entertainment. It will change the culture of television and movies. Apple will again be the innovative leader of this change. In the early days of the smart phone, the iPhone came out and left others in its dust, scrambling to add features and functionalities closely modeled after its creative stretching of the communication envelope. Could the catalyst spearheading the wave of innovations that will come with Smart TV be this little 7-inch device called the iPad Mini? How much should we pay, would we pay for that kind of tool for change?
Something to think about…
I triple-dog-dare you.
jcbinkley has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Ford, and McDonald's. Motley Fool newsletter services recommend Apple, Ford, The Coca-Cola Company, and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!