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What’s the Secret to Apple’s iPad Success? One Analyst Says the Company Has Bought Up Key Components

Mar 4, 2011  •  Post A Comment

The secret to Apple’s iPad success may not just lie in its design and software, but in the way Apple prices the device and sources components, making it harder for rivals to compete, Bloomberg reports, citing an analyst report.

The iPad had a 75% share of global tablet shipments last quarter and in under a year has surpassed the iPod as Apple’s top seller, the story notes.

But the reason for its edge may be in Apple’s pricing strategy, according to Sanford C. Bernstein analyst Toni Sacconaghi. The iPad is priced more aggressively than Apple’s other products, which makes it hard for competitors to undercut it on pricing.

Apple is able to do this because it uses its cash reserves to buy up a larger number of components and secure manufacturing capacity in advance more cheaply than rivals, the story says, citing the report. That means tablet competitors are "thwarted currently by reported shortages in key components including touch panels," Sacconaghi said, the article notes.

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