We mentioned how astonishing the entry price point for the iPad is, and how it might be its killer feature. But thinking about it, Apple's pulling off a magic trick that is going to cost you plenty of dollars over the next couple of years.
The raw unit pricing of the iPad is shown in the screengrab from Apple above—there's that magic $499 starting price (just $10 more than a Kindle DX) staring right at you. But that's the basic 16GB version, yes? Doubling the storage to the 32GB version will cost you $599, and doubling that to 64GB will take it to $699. And that's starting to sound pricey—but remember the much more expensive MacBookAir, trading on its revolutionary super-skinny unibody aluminum design, originally came with just 74GB of hard drive space (using Apple's new 10th power system for GBs).
The 3G units, which also include GPS, are $130 more across the line making them cost $629, $729 and $829 respectively. The low point is still reasonably affordable (and it's actually not much more than my 32GB iPhone 3GS cost me over here in Europe—it's pay as you go, hence there's no carrier subsidy.) But that top price of over $800 is reaching towards the entry level MacBook's price, and it's undeniably expensive. For the dollars you do get a GPS navigation system with an unprecedented 9.7-inch screen, and enough on-board storage for entertainment for a week of vacationing away from your home's hard drives.
Don't forget data though: In the U.S. we know that's $14.99 a month from AT&T for 250MB, and $29.99 for an unlimited plan. It's contract-free though, which won't amaze us Europeans, but is pretty astonishing for you guys on the other side of the Atlantic.
How much does that add up to for, let's say, the first year of ownership? Assuming you go for the cheapest option without 3G you'll spend just $499. If you go for the cheapest 3G unit, and buy data every month for a year it'll cost you a grand total of $808.88—less than top-end iPad's unit price. Buy that one, and add an all-you-can-eat data plan and you'll spend $1,188.88. Which is a lot.
But wait. Here's where Apple's magic trick occurs: This is iPad 1.0. It's amazing, it's a game-changer, it'll sell by the million. But you know that next year the iPad 1.0 line will get trimmed to a few models, and a price slash. Because iPad 2.0 will be out. With double the storage, with a camera (not a big omission in my mind, but your mileage may vary), with a speedier Apple A5 processor aboard, with better battery life, stereo speakers, extra whoofle-dust sprinklings and a built-in kitchen sink.
Its inevitable, it's typically Apple—which followed this business model for the iPhone—and it's typical for electronics. But you know that you're going to want the 2.0 even if you bought the 1.0, since you'll be seduced by its power, and by how much fun you had with the first version. And since you're not in a data contract you'll buy one, for probably the same price you paid for the 1.0. You might even spring for more storage inside, or a 3G one if you didn't get that before. And then there are accessories...
The same will happen in 2012 too, when the iPad 4G comes out, stuffed with LTE goodness, cameras and god knows what else Apple's squeezed into its chassis. If you go for the cheapest option every year, you might spend just $1,500. But if you're a gadget geek with deep pockets you could end up forking over $3,600 to Apple and AT&T. You'll probably have enjoyed the experience a whole bunch, though.
Clever Apple, eh?