Yesterday, the world was treated to a classic example of what might be described as "customer lock-in."
Apple launched a new iPad Mini tablet and priced it at $329.
For those who aren't obsessed with gadgets, the iPad Mini tablet is pretty much the same as Amazon's Kindle Fire HD tablet and Google's Nexus 7 tablet, which are both priced at $199.*
In other words, Apple is charging $130 more for its small tablet than Amazon and Google are charging for theirs.
Now, my family has no plans to acquire any small tablets in the near future. Our first generation iPad (1), iPhones (2), Macs (4), Apple TVs (2), and TVs (2) provide all the screens four people currently need, especially with two of the members of the family being pre-phone-age.
But, needs being needs, I suspect we'll feel the need to acquire some more screens before long.
And given that kids don't really care what size screen they watch things on, it wouldn't surprise me if one of those new screens were a mini tablet screen.
Now, kids being kids, there's a higher-than-average risk that any new mini-tablet will be dropped, sat on, stepped on, or otherwise broken within minutes of being acquired, so price is a big factor here.
So, I noted with interest the fact that Apple is charging $130 more for its small tablet than its competitors.
And then I noted with chagrin that, if I have to get a mini tablet, I will probably decide to begrudgingly shell out that $130.
Because Apple has me by the balls.
Specifically, after five years of selling my family stuff, Apple has become the personal-electronics platform for the the whole household. We all know how to use Apple stuff now, and we're not eager to throw away five years of accumulated knowledge and start from scratch.
More importantly, Apple has now become the virtual "library" or bookshelf in which we store most of our visual and audio entertainment (namely, movies and books on tape). We're not movie fanatics, by any means, but we've bought a couple dozen over the years, and they're all sitting there in iTunes, where they're viewable on all of our screens. Same for the books on tape. And trying to save money by switching to Amazon or Android would mean junking all of those things we've bought, just as if we were switching from VCR to Betamax (competing video-tape standards from a thousand years ago).
Do we own so many movies and books that switching to an Amazon platform would be prohibitively expensive?
But it would be annoying and a pain.
So if and when my family does decide to acquire yet another screen that we don't need, I fear it's going to be an over-priced iPad mini.
(For what it's worth, though, the price of this gadget doesn't fill me with warm feelings of joy toward Apple. Rather, it makes me feel ripped off. This is the first time in the second coming of Apple that Apple has tried to charge a way-above-market price for a gadget because, well, because it can. Apple is already the most profitable company in the world, thanks in part to the loyalty of people like me. If Apple were going to take a big chunk of the profit it will make from charging me $329 for the iPad mini and share it with the millions of Chinese people who get paid peanuts to make the device, I'd feel better about paying that price. But Apple won't do that. Instead, it will just add my latest contribution to its $100+ billion cash pile.)
One more thing...
I'm going to go out on a limb here and bet that Apple is not going to be able to maintain that $329 price point in the face of intense competition from Google and Amazon. I bet that, within 6-12 months, Apple will decide to drop that price, perhaps significantly. So, rather than begrudgingly shelling out the $329 for a product worth $199, I might just decide to wait Apple out. I've been waiting two years now to upgrade my iPhone, and I've survived. So I'll see how long I can go without an iPad mini...
* Yes, I realize the Apple iPad mini is not EXACTLY the same as the Nexus and Kindle. Yes, I realize that some people will tell themselves that any difference, no matter how small, is worth paying whatever price Apple wants to charge (lest the people be regarded as hopelessly uncool tech philistines and subjected to silent pity and ridicule). But I'm not one of those people.