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back to article Steve Jobs bends iPad price reality

When he unveiled the iPad 2 last Wednesday, Steve Jobs hammered home the point that it was a bargain buy when compared to the competition. He was, at best, stretching the truth. At worst, he was shoveling bullshit. "Some folks are out there saying, well, they're only a little bit more expensive than us at $799," Jobs told his …

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A**hat analyst

So after all that, if you are comparing apples to apples Steve is still right. How is it bullshit?

Are they just mentioning that you can upgrade the flash capacity in Xoom for cheaper?

Actually you can't even do that yet because Honeycomb ships with SD support disabled.

Finally subsidised iPad prices haven't been announced, so Mr Arends is comparing the Verizon price with what exactly?

Just another useless analyst trying to look smart by mentioning the iPad..

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Flame

Agreed with all points - Brett Arends is an arse

You get the impression he is "reaching" to try and find a flaw, and has at best come up with an apple to orange comparison.

- He uses the telco offers to show apple being more expensive. It's not. It's simply that the carrier has not chosen to subside the iPad, but a *different carrier* has. Remove the carrier(s) from the equation and compare the prices. Oh look...

- He uses the 32GB/64GB to provide the 64gb iPad is more expensive. Surely comparing the Xoom 64GB is the right thing to do? Oh wait, you can't, so I'll just make some shit up about SD cards. That's like sticking a trailer on a mini and claiming because it's now got more storage space than a volvo estate, then - oh woe is me - the volvo is massively overpriced.

If the fanbois want to spend their money on overpriced toys, let them - but muppets like this should at least get their apple to apple (pun intended) comparisons right first before slagging them off.

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Jobs Horns

In all fairness...

I would never buy an ipad or a xoom the way things are now... I way prefer my trusty ol' netbook.

BUT..

1) having read the reviews on the xoom and ipad (and actually having used an ipad)

2) And discounting my dislike (that's an understatement I'll have you know) for apple.

If I _absolutely_ had to buy a pad thingo, I'd probably buy an iPad.

There is just no compelling alternative at the present time, unfortunately, although, hopefully this may well change.

But, the reality is, I wouldn't because of lack of need and in particular (2).

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Even on apples to oranges ...

$799 + a $65 Micro SD card is still more than $829. In other words at 64GB, it is slightly less of a rip-off.

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Just another

Deliriuos fanboi defending Aplle

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Anonymous Coward

@42

I do feel better defending Steve Jobs, who has made a fair contribution to computing over the years, than a lying journalist who doesn't know memory from storage and whose contribution was publishing a couple of books for people who can't think for themselves.

So yeah call me whatever you want, see if I care :-) Facts in this story are so clearly wrong that even less challenged hatebois can see his fallacy.

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Jobs Horns

Re: In all fairness...

"If I _absolutely_ had to buy a pad thingo, I'd probably buy an iPad."

In the long run Asimov's prediction will be borne out; lots of people will carry very small mobile computing devices that act as 'radio telephones'. Jobs has to make as much money as he possibly can, surf the tide of innovation for as long as he lives and is able to work, and then retire/die like the rest of us. Eventually Apple will be just one small name in a sea of PC clones. How people will respond to mention of the iPad in future years? For that you only have to remember a certain Cadbury's Smash advert.

As to the mention of Jobs shovelling ordure, this article reminds me of Billy Connolly's 'jobby wheecher' sketch. ;-)

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Stop

forgot to mention the cost of subscriptions

If you pick up a $100 subscription from Apple it is going to cost you $142.80.

On Android that is only $111.11.

Assuming that is an annual subscription that is $30.69 PER YEAR more simply because you bought an Apple product. More than one subscription increases that difference.

And that assumes you can even subscribe through Apple. Many subscriptions will not be available through Apple because of the high price required to cover the 30% cut. Of course Apple is pleased to block any subscription that might otherwise compete with an Apple service. So Apple customers remain in the dark and deceived.

Last time I checked, all consumers prefer to pay the cheaper price for subscriptions. And you will not get that on your iDevice. Unless Apple acts illegally and restricts the price available through other channels. And then they are all too high thanks to Apple.

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@Lewis Mettier

You appear not to have understood Apple's rules on subscriptions. You're correct that they take 30%. However, they also dictate that subscriptions bought on a separate device or via the browser can be transferrable without Apple taking any cut and that the cheapest price available elsewhere must also be available within the app.

Summary: if a subscription is available via an iOS app, it will be the same price as everywhere else.

The required 30% cut and the inability to pass it on to the consumer is why so many companies are up in arms about the current subscription pricing. The only potential consequence for consumers is that third party companies may abandon the platform. That's a valid concern, but the response is sort of obvious: if companies start to depart en masse then Apple can simply change their rules, while they have the vast majority of the market it's unlikely anyone will depart making it currently not an issue in practice.

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Re

Xoom: $799 + a $65 Micro SD card - $200 subsidy + cost of 3G plan

is still significantly less than

Apple: $829 + cost of 3G plan

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Biggest fail of all

EXCEPT there is no plan. this is the one difference, and its super annoying no one mentions it. It's bought piecemeal on-demand, not contract over a year. you get it for a month and then its no longer there, and you're done. no catch. so let's redo that math and count up the cost of every month of service you have where you don't actually need it.

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Jobs Halo

Apples...

It's a shock that a subsidized device with a 2-year contract costs less than one that doesn't require a contract? Hard to claim balanced reporting when you slip that one in, El Reg.

Anyway, Jobs' point is actually 2-fold:

1) Specs are not king

2) The other guys don't offer anything at the lower price point that Apple hits by lowering specs

(Fascinating, by the way, to see Apple competing on price.)

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Your last line show's you've noticed

the first really obvious nail in the coffin of Apple.

Yes, they've got great UI design and yes, they're up there with great specs on their tablet PCs. But now they've lost that they need to fall back to being cheaper than the other guy. Not extra features- not even rebranding limited versions of >5-year-old features. Just cheaper.

Apple's also showing their true colours by not announcing new ground-breaking features on the iPad2. I thought they were innovators?! World leaders, with His Jobsness leading us to a shiny new future?

Nope, nothing. Well, Facetime and HDMI out. But those are features that 1st-generation Netbooks had and that other ARM-based portable devices have had for years. Ah, seems they've run out of existing tech to copy. Damn.

They're playing catch-up with the hardware and are only competing based on their established brand and cost. And as they've always been sold as innovative and exclusive that's a pretty big sign that their rapid rise to power's flattening off now.

The thing about Apple is that they've always been seen as "premier" or "alternative" products by those who bought them. "Think Different" was their mantra, and their customers liked to think they did.

By competing on price you just drive away that exclusivity and alternativity, so you've lost the "pose value". By competing on price you only get people to look at the even cheaper alternatives and at some point very soon the cheaper alternatives will be better specced and better featured.

By pushing yourself as being all over the place- product placing an iPhone everywhere you can or getting Holby City to use totally-non-hospital-safe iPads, for example- you erode it even more.

The bigger and more power-mad they get the less they'll be popular with the che guevara t-shirt population (which is, predominantly, the young middle classes- exactly who they want to buy their stuff in future).

They'll become another gargantuan Microsoft-like corp. Except that MS put a long-term, stock-controlled, managed asset in almost every office in the world (and behind a good few of them), and has produced handsets that (until WinMo 7 at least) competed on fantastic levels of functionality. They have embedded systems, backend systems, mobile and portable systems, games consoles, phones, 25 years of product back-catalogue and a reputation for reliability that's only getting better as the 9x OSes fade into obscurity.

Apple, on the other hand, has produced a fashion accessory. A very popular fashion accessory, but a fashion accessory nonetheless. They've sold a few desktop Macs as well, but that's about it- and that's mostly driven by sales to people wanting to cash in on i-gadget software development.

Which is the most stable base? Getting your fronds intertwined with the world's businesses and homes, or having more chrome than the other guy and preying on the lack of technical knowledge of your users- even while you train them to expect more complexity and technical stuff?

I predict a good few more nails in the coming 48 months. Apple won't go away forever- and indeed we should be glad they didn't last time; they've pushed UI design and smartphone propagation to new heights- but in the next 2 years we'll start to see a decline in them, initially masked by larger sales figures now they're being sold at the likes of Wal Mart, but basically a decline. They'll start churning out units to actually meet launch demand- or maybe just a few thousand short- so they can hold on to people who want the latest gadget (but who'll have much more choice). They'll start cleaning up their act ethically- actually, they've already started that- as what people think of them starts to matter in terms of sales.

Mark my words. When they start raving about mass piracy on their App Store (in that it's clearly the reason for their declining profits rather than them no longer having the majority of smartphone users (leading to an accelerating downward spiral of fewer developers and less ad revenue so fewer developers)) THEN you know they're on the rocks. I'd also accept "when you can develop iPhone Apps on Windows" or "For Free."

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Troll

Bloody hell...

That is the most long-winded troll ever. More concise next time..

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Nothing Goes on Forever

You're not really going out on much of a limb by saying that Apple can't keep growing new markets the way they have with the iPhone and iPad.

Like it or not they invented the market for smartphones and tablets. They didn't invent the first of those products, just the first ones that were successful enough to actually create a market. And, not surprisingly, everyone else wants a piece of it, so Apple will fact some competition.

So if your prediction is that Apple growth and rate of innovation will slow, then I'd say you're right. But I think you way overstate the degree to which there is viable competition so far. Xoom etc. are woefully behind in both the UI and the number of apps, as well as the app store infrastructure. And pathetically behind in their marketing. The "but it's cheaper" line (even when not true as shown in this article) only works with a certain set of people, mostly the sort who are proud of owning a Zune instead of an iPod.

And as this article shows, if you just want a cheap tablet, the iPad wins. Not everyone needs 3G or 64GB.

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Oh dear

Someone missed the iMove and Garageband demos.

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Bad reasoning

Re: your last line shows you've noticed.

You are totally failing to understand the difference between competing on price and having a competitive price. Apple aren't and never will compete on price (not while jobs is in charge at least). They have the highest margins in the business. Worryingly for their competitors that is the case even though for the iPad they also have a competitive price. If you had any understanding of business you would appreciate just how significant that is and that it means the competition are totally blown away. Apple are pretty much controlling the crucial lines of the tablet component supply chain. Their competitors have higher prices and lower margins, the worst place to be.

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Agree

Finally a sensible comment

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say it enough an you belive it to be true

"Like it or not they invented the market for smartphones and tablets."

No they did not,

There was already a massive market for smartphones and tablets were in use where there was need for them.

All apple did was to come up with a very good UI which opened the market for smartphones to the mass-consumer instead of the tech or business users. iphone has never been the market leader in smartphones and as far as the ipad goees Is it not just a large ipod touch?

The iphones failure will come about as people discover the drawbacks of sitting in a walled garden. I have just got back from my holidays. I took my htc desire with me and my daughter had her much-loved iphone. I took a photo, which she wanted a copy of to post to her facebook page... I'll send it to you by Bluetooth....no, you’re not allowed....same thing with a video clip.....unless basic functions like this are addressed by apple then they will only ever produce bling or fashion accessory items with the SMALLEST market share.

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Bluetooth????

No email on your HTC?

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Anonymous Coward

Data on holiday!!

Unless they had access to free wifi, the cost of data whilst on holiday (if roaming) might be the reason not to use it.

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All marketing is bull

So? Only idiots believe marketing hype .. but there are millions of idiots out there.

Personally, I don't trust salespeeps at face value .. I weigh the overall cost verses specs verses usability and then .... then I decide to buy an ipad.

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the required title !!

".... then I decide to buy an ipad."

so, your taking no notice of your own product reserch particularly when it comes to usability... do i need to point out its many flaws... bluetooth is just a starter !

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Happy

"then I decide to buy an ipad"

So you do all that work in researching all about it...then just buy it anyway?!

Quicker to just buy without wasting your time reading up on it, if you've already made your mind up to buy one?

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Oh yes I bought an iPad Wifi+3G with 64Gb

Actually I bought an iPad on the day it was released in the UK ... I had not planned to buy one, just to go and look at one as I was in the Shopping Mall on the day but after an hour of using one in an Apple store (just hands-on no interference from Apple staff).

I have been buying gadgets / portable computing devices for over 20 years and have been through Palms (III, IIIc, Abacus), Psions (3a, 7, MC400), Tandys (Pocket PCs, Model 100), 1 x WinCE, (bought as a handheld GPS but with 'full' wincing functions - shudder), 3 x Netbooks (2 now running as embedded systems with the other 1 complete with built-in 3G modem as neat mobile Ubuntu lappy), iPod Touch/iPhone and even a gloriously wonderful Sinclair Z88 (upon which I typed up my Computing PhD) [All of which I still own and use on different occasions] ... for this long I have been wanting "ubiquitous computing" to come to the fore and have been after an always-on, multi-touch, intuitive GUI, portable device with full-time connection to the Internet (online since '89) ... I hate to say it here (expecting the downvotes) but the iPad is the best device that I have seen/used that comes closest to my own personal mobile computing Nirvana.

Is it the /perfect/ mobile computing device? well .. not quite there yet but a massive step in the right direction and damn close .. for me it needs to fold in half in a seemless manner [no join] and have a retina-level display .. the iPad2 cameras are a great idea (quick snaps, facetime, barcode scanning [really useful]) ... Over the last 8 months I have found that large on-board memory actually is not a big requirement for me as I have 9Tb of ZFS'ed home server disk space and streaming is excellent (and surprisingly good even over 3G with variable bit-rate HTTP streaming) ... although an increasing amount of onboard space is being used for PDFs (it makes a great technical library ereader).

I will drop in to the Apple store on the 25th to look at the iPad 2 .. although I currently don't see a need to upgrade but a hands-on might prove decisive 8-). I suspect that the iPad 3 (coming sometime between Sept'11 and Mar'12) will have a level of functionality/usability/design that is different enough to make the jump a simple upgrade decision.

So yes .. I have done over 20 years of research and the latest purchase was an iPad as it meets my needs, is a great upgrade to a smart phone. I suspect some people may have failed to see the smiley 8-)

- BingBong AvonCalling

PS: Expect an update from Lewis as BBC (from AFP) are just reporting "extremely high" radiation coming out of Reactor 4 because its lost its cooling water and Reactor 3 radiation is stopping staff getting to R4 .. so the saga continues and Japan is not out of the woods yet and there is still potential for a bigger disaster than the natural ones.

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@bluetooth is just a starter!

Huh? Usability is fantastic, have you actually had real hands-on time with an iPad? Bluetooth also appears to work fine with my keyboard and stereo headset.

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Oh I C

I did forget the smiley in the first post !! LOL GR8 ;-{

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Only reality distortion is the from the author

It's really simple, Jobs is making a speech at his sales function for Apple. He's not making comment on the industry. This isn't an industry speech.

So how many salesmen push the truth? More than a few I imagine. So why are we expecting Apple's lead salesman to be any different at one of their own events?

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Jobs Horns

Re: Only reality distortion ...

So what you are saying that the CEO of a large company is as big a liar as a second hand car salesman? CEO's have fiduciary duties and this doesn't include lying.

If you look a number of his speeches, whether they are to his lovers or industry the standard is required to be the same, he distorts and lies about so many things that he becomes just one big yawn.

He's got a problem or two with product and he is just trying to patch up his ego and reputation of his products. I know al the iPhans will trot all that garbage put out by Apple PR but the fact is they are ripping their supporters big time.

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Actually...

SJobs isn't a second hand car salesman. His father is ;)

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The Apple warranty is bad, too

Whether or not you get warranty service seems to depend on so many unknown variables that it isn't really a warranty.

Better have a good lawyer.

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Have you made an Apple warranty claim?

I've made two warranty claims on Apple. The first was for a battery that 'popped' (cell rupture) and they supplied a new battery without argument. The second was for a replacement DVD drive that stopped writing DVDs. On both occasions the genius bar person remarked that the machine had been opened (I upgraded the hard drive) but as there was nothing to indicate this was a contributory factor, they would honour the warranty.

If you have a bad story to tell, then tell it. Otherwise it's just opinion and hearsay.

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Anonymous Coward

@Gulfie

Yes, I have tried to make a warranty claim on my G5 imac, the fan slowly, over time, started making more and more noise, until it was louder than the speakers. They didn't want to know, despite me having forked out for applecare.

Oh, the combo drive has also stopped writing DVDs...

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Yes I've made 4 Apple 'warranty' claims that I can remember (all in UK) ..

The first Mac I bought was a secondhand G3 iMac on eBay which was 10 months old .. it arrived with a dodgy HV CRT video board fault and so I took it to the local Apple dealer who said they needed original purchase invoice to have it covered under Applecare .. the old owner did not have it but remembered where they bought it from and I contacted this other Apple dealer who gave me the original purchase details and these were accepted by my local Apple dealer and Apple and after 10 years it is still in working order and running OS X 10.3.

A new iMac G5 that turned up with a line of stuck pixels down the LCD [dodgy video card or LCD] .. Apple sent a new one immediately without requiring a return to happen beforehand. The new and old ones were swapped through UPS [worlds finest couriers in my experience!] .. Apple have a DOA return policy for the first 14/28 days I believe. 6 years on and the wife still uses it as her design workstation with just a single disk drive replacement (before it completely failed).

In-ear headphones broke after a few months of use .. Apple sent replacement ones (via UPS) and picked up the old ones (via UPS) no questions asked.

Bought a G3 iBook discounted at the local dealer .. after 3 years of use it developed a video fault .. screen would freeze ... checked online and it was due to a motherboard bending issue and Apple had issued a free repair program for up to 5 years after purchase .. got it repaired for free and 8 years after purchase it still gets used occasionally as its still a neat 12" laptop.

CD/DVD writers just fail regardless of manufacturer .. I've found dual-layer DVD burning to be the first to go and then its downhill ... still a Samsung DVD-DL burner is only £12 to replace these days.

So in 10 years of buying Apple kit .. I've had nothing but excellent customer service from them .. sorry if this does not fit in with people's own opinions but these are my actual experiences and I would be the first to moan about bad service or crap kit.

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@AC 13:14 - noisy imac G5

The G5 processors run hot and so need a good air flow over them. This sounds like you have a dust build up on the bottom air intakes ... take the back off and vacuum it all out and you will see a huge drop in temperature and fan speed ("iStat Menus" is your friend get it for free from http://bjango.com/mac/istatmenus/ ).

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Works Botha ways

Still waiting for The significantly netter and cheaper offering. With the Xoom you can use flas when it's ready, 4g after an upgrade and the microSD card when google is ready.

I'm in the lucky position to use my Android mobile as a WiFi hotspot, so no need to shell out money for another contract and hardware.

Let's wait another few month for an Android Tablet to match an iPad.

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even with swype

typing on a droid isn't easy :)

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Anonymous Coward

re Works Botha Ways

You're going to be waiting a lot longer than just another few months before you get an Android device to match the iPad and by then Apple will have moved on again. Which ever way you dice dice it, fanboy or not, Apple's got a hell of a head start...

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Huh?

If you'd LISTENED to him he was not talking spec-for-spec he was talking about the price for entry into the market - in other words for the mentally-challenged, what the minimum cost of buying that piece of equipment is.

Even Motorola seem to admit they messed up so anybody calling Jobs a bullshitter is also calling them bullshitters.

Forget your specs, that is not how these marketplaces is work. That is why other tablet makers are failing, they are pitching a list of specs to people who just do not care...

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Erm

He didn't miss the point. You did. Jobs was saying that no-one has been able to produce the experience of an iPad for a competitive price. Motorola produced something in the same ballpark, but could only start their pricing at the high-end of the iPad line. I guess we'll never know, but I presume that Motorola found that they couldn't produce a 16gig wifi only xoom at say $400, and so plumped for higher specs and higher prices instead. Others have produced things that are cheaper but do not replicate the quality of the iPad experience closely enough.

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Bronze badge

Re

"But this is a viable strategy for him - define what the "market" is for a product by ignoring the growing diversity will make your potential and (especially) existing customers less likely to consider the alternatives, simply for the fact that they will not regard them as such."

Sadly, MBA programs teach this is standard for marketing classes. The "market" is whatever you define it as. You could say "the market in which Apple's iPad competes is defined as people who have purchased an iPad" and then claim that they have 100% of the market.

That's why marketing is the helmet-child of the business world. Mouth breathers fall for marketing scams. Therefore Apple users are mouth breathers.

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Apples to Apples

"For $799, Motorola provides a Xoom with both Wi-Fi and 3G, and includes 32GB of storage space. A comparably equipped iPad goes for $729."

The problem is, though, that, certainly for the original iPad, the biggest seller was the $499 16GB wifi model, and this should be expected to become even more the case, due to increasingly common wifi tethering on phones, and the media streaming stuff built into iOS 4.3 (streaming media was always available, of course, but previously via third-party apps that the average consumer mightn't be aware of). Motorola doesn't have anything at that price point.

"If you sign up with Verizon for that Xoom with a two-year contract, you'll pay $599. For a comparably equipped iPad from Verizon, you'll pay the full $729. From AT&T, it's currently $629, and that's for the now-discounted original model"

That's without a contract, though, no? Orange in the UK will sell you a 32GB 3G iPad for 149 pounds, but you'll be tied into a 2 year contract at 27 pounds a month. I don't think that the US carriers currently offer the iPad on contract, but it's unreasonable to compare a month-to-month or pre-paid plan with unsubsidized device to a two year contract with subsidised device.

"Should you want more storage space in your iPad than 32GB, you'd have to move up to the $829 64GB model – a $100 premium. Should you want to upgrade your Xoom's storage space, on the other hand, you could simply slip a 32GB card into its microSD slot – and that 32GB would set you back about $65"

Not currently, you can't. At this time, the microSD slot in the Xoom cannot be used; this will be amended with a software update at an unspecified point in the future. By the way, the obvious reason one might want lots of storage on a tablet is for playback of high-def media; the $65 microSD you're talking about is almost certainly a Class 2, which means that it has 2MB/sec write speed and an unspecified but generally low read speed, and which might struggle with HD media. For a class 8 or 10 32GB microSD, you're looking at more like $100, rising to $150 or $200 for a big brandname like SanDisk.

"We'll leave it to you, Reg reader, to divine Jobs' intent, but when comparing pricing, we advise that it's always best to compare, shall we say, apples to apples."

Indeed. So perhaps best not compare subsidised price to unsubsidised price, then.

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Stop

don't forget the cost of subscriptions

And do not forget the cost of subscriptions.

Apple insists you pay a higher price for media subscriptions. Or, they will be excluded.

Currently, music subscriptions are excluded due to Apple's abusive policy.

Apple insists upon a 30% cut. Android only 10%. You figure it out.

And if Apple gets there 30% EVERYONE has to pay the higher price even if they do not buy an iDevice.

Tell your fiends to stay away from Apple products.

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AF
FAIL

Seems like Brett Arends is the one distorting reality

To quote Brett: Not so fast.

32Gb Xoom: $799

32Gb iPad: $729

64Gb Xoom: $864

64Gb iPad: $829

So far, so good - Brett admits the iPad 2 is cheaper.

But then he starts on about how you get a $200 discount on the Xoom if you sign a 2-year contract. This may well be true, but he fails to point out that means YOU'VE SIGNED A 2-YEAR CONTRACT!!!

There's no contract with the iPad. At least, not when bought from Apple. I'm sure some carriers will offer you a subsidy to lock you in, but Brett hasn't mentioned that, so we can only go on the figures he's working from. And I note Brett doesn't list the total cost of said 2-year contract - I'm guessing it's more than $200, though...

So, after all that, all Brett has done is point out that yes, El Jobso was perfectly correct, and the iPad 2 is indeed cheaper than the Xoom across the board (since there is no 16Gb Xoom).

Perhaps Brett should spend more time comparing the prices of pocket calculators before posting another article like this one?

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If price is what matters...

So the iPad 2 is cheaper than the most expensive Android tablet currently on the market? That's nice.

If price is really my priority, there are several decent Android tablets available for under $300 (with no contract), and more that are under $400.

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Re

Idiots like you are missing the point.

The contract may or may not cost more than the $200 difference, but that does not matter because YOU GET THE 3G SERVICE.

So the pricing really is:

32Gb Xoom: $599 ($799 - $200 = $599) + cost of 3G contract

32Gb iPad: $729 + cost of 3G contract

The same Verizon data contract will cost the same for all Verizon users. Therefore the cost of whatever contract comes with the subsidy would also be applied to the iPad, except you don't get the subsidy.

But let me guess, you bought a 3G one without a contract because you care about the fashion statement Apple makes and you wasted money on the "better" model with 3G, not even knowing what it is. But it costs more and has more Jobbie shineys, so it must be worth it.

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