Apple (AAPL) will cut the price of the iPad if sales aren’t as robust as anticipated, company execs told Credit Suisse analyst Bill Shope.
After meeting with Apple executives CFO Peter Oppenheimer, VP Eddy Cue, and SVP Ron Johnson, Bill wrote in a note for clients today:
“While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated)”
Here’s the rest of what Shope said:
- Management declined to tip their hand about Verizon.
- Instead, they say they’re focused on international expansion. The iPhone is only in 86 countries, while rivals are in 160 countries.
- Apple is happy with enterprise adoption of the iPhone, and it thinks that’s a market that will expand.
- The movie industry’s legacy deals are screwing Apple from getting the content it wants. For example, HBO has locked out certain titles which Apple can not get. The contracts protecting those locks won’t expire for a few years.
- It’s hard to sell a TV show for $1.99 when Redbox is renting a whole movie for $1.00.
- On e-books, Apple cares less about the long-tail and more about the hits. It wants the ‘right titles quickly.’
- Apple believes the education market presents a massive opportunity for the iPad.
- Management doesn’t see the iPad eating at either iPhone sales or notebook sales.
- Despite the low price of the iPad, Apple “expects strong profit performance.”
- Apple will be nimble with the price of the iPad. If people aren’t buying iPads, Apple could cut the price.
- To the critics of the iPad, Apple says ‘bite us.” OK, not really, but they say most critics haven’t played with one, and they’re focused on what the iPad doesn’t do, rather than what it does.
- Apple plans more retail stores around the world.
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