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Could Apple iPad prices fall?
In a report to clients issued Sunday, Credit Suisse's Bill Shope shares the highlights of a recent meeting with Apple (AAPL) management.

The one getting the most play — first in the Wall Street Journal's Market Beat blog — is Apple's apparent (and surprising) willingness to talk about iPad pricing.

“While it remains to be seen how much traction the iPad gets initially," Shope wrote, "management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated)."

Given that the iPad's release date is still nearly two months away and that its starting price — $499 — is $500 less than the Journal's pre-introduction estimate, talk of price cuts seems premature.

More credible is Shope' report about how Apple sees the iPad fitting into its product lineup:

"Apple wants the iPad to be the best device for a few key use cases. For instance, the company believes it could eventually be seen as superior to both handheld and notebook devices for browsing the Internet, using the App Store, and consuming mobile media (video, photos, and e-books). Nevertheless, in other areas, notebooks, the iPhone, or an iPod may be more appropriate. This clear segmentation of capabilities suggests that cannibalization may be less of a concern than most currently believe."
The iPad’s $500 starting price was lower than people expected, but Apple could still make price cuts if the device fails to gain traction among consumers, says an analyst.

Recounting his meeting with Apple executives, Bill Shope of Credit Suisse said Apple indicated it would consider lowering prices if initial demand appears to be slow.

“While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),” Shope wrote.

If Apple did make price cuts shortly after the iPad launch, it would be reminiscent of the original iPhone release. Apple sold the original 8GB iPhone for $600 when it hit stores in June 2007; two months later, the company dropped the price to $400.

Wall Street analysts estimate Apple will sell between 1 million and 5 million iPads in its first year. Charlie Wolf with Needham & Company said that because Apple is defining a new category of devices, sales of the iPad are likely to ramp slowly, but “the $500 starting price point is low enough to attract a sizable portion of the early adopter crowd, consisting of iPhone and iPod owners.”