Perception: An iPad Is Worth More Than a Galaxy Tab
As I believe Descartes once said, “I think, therefore I think I’ll by an iPad.” What he was really saying, when you get past all the intellectual mumbo-jumbo, is that what we perceive is far more important than reality. I, for example, perceive the McRib to be a valuable foodstuff and I hunt it down yearly when it is available. In reality it is poison.
To wit: Pipar Jaffery’s own Gene Munster performed a survey, showing 65 consumers an iPad and a Galaxy Tab. He asked them how much they thought each of them cost as well as their preference. The results were interesting.
First, the respondents found that the iPad was overwhelmingly preferable to the Galaxy Tab and that the iPad was “worth” $417 (real price $629) while the Gal Tab was “worth” $283 (real price $599). What the folks were saying was that the iPad “felt” expensive while the Gal Tab “felt” cheap, although, in reality, the market has priced them at approximately the same point.
This is the sort of behavior the beguiles CE manufacturers to no end. Items that are supposed to “feel” expensive, the Dell Adamo, for example, are undesirable when they come from anyone but Apple and so laptop and accessory manufacturers have to erect a scaffold of excitement around their products (see Droid) or go the opposite route and blow their prices down just to the end of profitability (see the $400 laptops in the Best Buy circular).
In some rare cases the former tactic works but it hasn’t worked in a long while. Perhaps the last time it worked on a large scale was with the Motorola RAZR, a product that was so beloved and desirable that Motorola bet their whole company on it and nearly lost. Why, then can Apple pull it off? It’s mostly about design as well as a halo of desirability they have maintained through their advertising and media presence. You don’t see any laptop hunter ads coming out of Apple mostly because MacBooks aren’t priced differently, for the most part, so it’s like being on a game preserve with crippled elk rather than a real hunt. But you also don’t see Apple talking up bargains because the narrative it’s created is that “this costs $X. It is different from all other objects. Therefore it doesn’t cost $X-50% on Black Friday. We may throw you a bone, but you’d need a microscope and tweezers to catch it.”
So even though the Gal Tab is a nice product it just doesn’t have that halo. The first CE company to figure out how to pull off Apple’s antics wins the prize.