If you haven't heard by now Apple stands to make some nice profit for every iPad sold so people are asking a lot of questions around pricing and why the upgraded versions are so expensive.

What those people need to do is look back at history and realize how Apple thinks. They have a brilliant marketing department that realizes the iPad might be the next big thing... But they also realize it might be the next iFlop. When a company prices a product the goal is to make money so they consider how many they think will sell, how many to order and what the price will be.

Apple doesn't know how well the iPad will do but they want to at least make a certain amount back based on the amount invested in the iPad so they pick a price most likely based on cost, development time and number of iPads they have committed to having produced.

They don't make as money money on app sales as other companies make on game and accessory sales so they can't sell it at a loss, the goal has to be to at least break even if possible which is how the pricing they came up with now most likely came about..

If it iFlops and doesn't sell like hotcakes the current price helps to recoup costs but what happens if its an iSuccess? The price will drop and it will drop fast!

Don't believe me? Just look at the iPhone... Apple did the exact same thing with the iPhone, they played it safe and priced it such that even if it didn't turn into an iSuccess they would most likely sell enough phones to at least cover a good portion of the cost.

But look what happened once they realized what a success they had... If the number 1 complaint about the product is cost (which was pretty much the case with the iPhone) then lowering the cost can instantly boost sales!.. If you can drop the price of an item and make half the profit but sell twice the number of items is it worth it?

In the Apple world it is.. The more iPads they get into the world the larger of a grip they will get on the tablet market..

That one move, dropping the iPhones price so soon was most likely an extremely large part of the iPhones overall success... Sell the product, drive the market, attract developers..

If the iPads sell like hotcakes Apple will drop the price because they want to drive the market, they want the developers to convert current apps and make new apps for the iPad..

Remember, one of the number one rules of marketing.. Price yourself right.. You can always lower your price but customers will never forgive you if you raise it.