I’m fascinated by the reaction to today’s announcement of the iPad’s UK prices.  It’s a very visible sign of Britain’s economic decline.

I’m no Apple fan (in fact I own nothing Apple), but the iPad grabbed me and I’ve been waiting since February’s announcement to pick one up (I want a UK guarantee and insurance as I’ll definitely drop it repeatedly).  But the reality of the pricing has hit me hard - and it doesn’t seem that I’m alone.

First, let’s get the maths out of the way.  The 16GB 3G model is $629 (excluding US sales tax).  Converted to GBP at today’s Visa rate (1 USD = 0.680051 GBP) that’s £427.  Add on the UK VAT and we’re at £502.  The actual price is £529 so there’s a bit of a premium but it’s hardly decisive.  So what’s happened?

At launch in the US, people were surprised at how cheap the iPad was (me included).  Apple have sold 1 million in the US; exceeding their estimates so much that they were forced to delay international launch.  Now the price is out for the UK and we’re all grumbling that it’s too expensive.  But these are what the prices were always going to be.  One only needed to grab a calculator and work it out.  I didn’t do that, I just assumed that if the US thought it was cheap so would I when a UK price came out.  But I don’t, and I don’t think I’m buying one (Update: But I bought one anyway on the opening weekend.  See below.)

There’s a psychological barrier at £300 for me.  Anything around that price doesn’t need a huge amount of thought.  If I want it, I’ll have it and not worry too much about usefulness.  Once I reach £400 I’ll start to think whether I REALLY want it - and it ceases to be a consumable (which needs little justification).

At £529 the iPad has become an asset which needs to provide a return on investment - not purely financial, but it needs to give me £X worth of value each year.  I can’t justify £529 on a device for reading books and websites.

From being uncharacteristically bullish on the iPad’s prospects in the UK, I have changed in the space of three hours to predicting very sluggish sales here.

Update: Bought an iPad - I figured that you can’t comment on something properly without owning one.  So I drove down to Edinburgh, bought one, and drove straight home.  It’s an awesome bit of kit, but it won’t replace anything I already own.  It has replaced the Blackberry for reading news/RSS feeds though.  PC World in Edinburgh sold 190 of their stock of 220 on the first day.  For travelling it is going to be brilliant.