Kindle Review – Kindle Fire Review, Kindle 4 Review

There are quite a few people waiting for the Apple Slate. They plan on having the Apple Slate or iTablet as their eReader instead of the Kindle or the Nook.

It makes you wonder -

1. What if the Apple Slate keeps getting delayed or never releases? We have been expecting it for over a year now.
2. What if the Apple Slate is priced too high? 

Mike Elgan lists 7 reasons an eReader is a lousy gift idea.

He focuses almost entirely on delaying gratification and hoping for a better deal or a better product – a misleading argument because if you followed that stream of thought you would NEVER buy anything.  

Mike Elgans’ first reason for not buying an eReader is quite predictably Apple -

Apple might release an Apple Slate or Tablet Reader in the middle of next year.

Here’s a question though -

How many of the people who wait 5-6 months for the Apple Slate will be able to afford it?

It’s a crucial question because Apple makes aspirational products.

What is an Aspirational Product?

Once again we call on Wikipedia to enlighten us -

In consumer marketing, an aspirational brand (or product) means a large segment of its exposure audience wishes to own it, but for economic reasons cannot.

… To keep the premium level of a brand high, the consumption portion of the audience should not exceed 30% of the aspirational audience.

The key thing to note is that products don’t have to be very high-end to be aspirational – as long as there are customers for whom it is just out of reach its aspirational.

1. For people with a hard $100 budget the $150 dollars eReaders could be something they aspire to. 
2. For people with a hard $200 budget the $259 eReaders might be what they aspire to.

Consider how Apple positions its products – always at the higher end, always a bit exclusive, always a bit expensive. 

You have to ask yourself -

Why wouldn’t the Apple Slate be an Aspirational product?

It doesn’t benefit Apple to make the Apple Slate a $250 product. Instead they’ll go for -

1. A $500 to $800 product.
2. A $100-$300 price with a data plan.

The total cost of the latter would be colossal – However, there’s nothing wrong with taking on some debt – It’s not like we just had thebiggest debt fuelled crisis since the Great Depression.

Basically, if you’re fiscally responsible, there’s a high chance the Apple Slate will be an aspirational product.

Why wait for something you probably can’t afford?

Obviously, there’s the 30% of the exposure market who can afford it.

However, the remaining 70% have two interesting choices -

1. Apple Slate comes out and you realize you can’t afford the total cost of ownership and you buy a Kindle or Nook anyways. 
2. Slate comes out and you spend more than you can afford just to be able to ’possess’ it.

The money is in aspirational products. That’s why Apple has just 10% or so of the PC market and still makes 30-40% of the profits.

Is any company going to challenge Apple with an Aspirational eReader?

The really funny part is that it’s not even possible -

1. Amazon and WalMart are fighting over book prices – there goes their ‘exclusiveness’. 
2. Sony Reader and Nook are fighting Kindle on price. They lose their branding.  
3. Microsoft and Dell will have tablets – However, they’re associated with low-priced Windows PCs.
4. Asus and Acer and netbook companies sell $300 netbooks. How can they get away with $600 eReaders?

Every other company is going for the low-price, high volume, eReader market.

Here’s my prediction -

Apple are going to sell a $700-$800 Slate eReader. It’ll be $300 or so after subsidies (with data plans).

They are going to capture 90% of the top end of the eReader market.

Apple’s hold of the top end of the eReader market will earn them 50% of the total eReader profits.

Filed under: apple ibook reader Tagged: | apple slate, apple slate ereader