A relatively small price cut, it seems, can make a big difference
In a proprietary survey conducted last fall and released Wednesday, RBC Capital’s Mike Abramsky asked some price-sensitive customers who said they had no intention of buying an iPad whether a $100 price cut might change their minds.
Among 1,100 respondents, 17% said they would be “somewhat likely” to buy a $399 iPad and 3% said they would be “very likely” to do so.
A separate survey conducted for Morgan Stanley got similar results. According to Katy Huberty:
Our survey also asked about a potential $100 price cut to the iPad 2 and the responses indicated 15-20 million incremental US unit demand and 38 million global demand. For reference, each incremental one million iPads could add $0.20 of EPS.
A $100 price cut on the iPad 2, it turns out, is exactly what Apple (AAPL) delivered on Wednesday.
