https://www.youtube.com/watch?v=0XJg74qnvxE
The iPad was a new product category. At the time, there weren't people using tablets. It was not a mainstream product. Steve Jobs pitched the iPad not in terms of a category or a type of solution but rather put it in the bigger context of what people were currently using at that time. So when he pitched the iPad, he didn't say "I built a better tablet", rather what he said was "This iPad is better than a laptop for certain jobs that you might consider it for". Throughout this keynote, he compared the iPad to many familiar products people already knew and were using and he showed how the iPad could fit into our worlds and cause a switch, replace those products with something better.
"The iPad is so much more intimate than a laptop" (He talks about a more tactile feeling of how you may work with an iPad vs a laptop keyboards which could be clunky in certain environments)
"Much more capable than a smartphone" (Smartphones are limited in screen size, especially when keyboard is open. With an iPad you have much more space)
"Get the newspaper in the bed" (Use case many people know and people may buy an iPad for this reason)
He is not really pitching new problems or new jobs that he wants customers to do but rather all the things they are currently doing and showing how an iPad is better for them.
When we are prioritizing problems and looking for how we are better than existing alternatives, we want to connect the dots, and show what people are using currently, why that's broken, how we are better, and then the next step is to connect the dots to price as well. That's what makes it a very compelling offer.
When Steve Jobs gets to pricing, he doesn't lead just with the iPad pricing in isolation, he talks about how much the closest competitor costs. The cheapest laptop was 999$ and he anchored against it and said "we want to launch the iPad at 499$" and the room got very excited.
First, he sells the product from an emotional standpoint. In the demo, he makes the case for how an iPad can live and compete against the laptop and that's what gets you to want the iPad, that's where the emotional buy happens.
Price is usually the rational part of the purchase decision. The more you can remove emotion from that, the better it is to close the deal much easier. So he basically rationalize how they came up to the price of the iPad which for some people might be expensive but once you anchor it against a laptop it doesn't necessarily feel that way. So if you are going to buy a laptop, for half of the price you can get a more intimate iPad. That's essentially the value proposition here.