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Apple reducing iPad 2 orders, but 'too early to tell' if it will be phased out

post #1 of 32
Thread Starter 
Apple has begun reducing orders for the iPad 2 ahead of the unveiling of a new third-generation iPad, but it's not yet known whether Apple will keep the iPad 2 around at a discounted price.

Sources in Apple's supply chain told DigiTimes that orders for the iPad 2 are gradually dropping ahead of an anticipated third-generation iPad. While iPad 2 orders are being reduced, orders for the next iPad, reportedly set to launch in March of 2012, remain steady.

Various reports have suggested that Apple will continue to sell the iPad 2 at a discounted price after it launches a third-generation iPad. Apple already employs that strategy in offering the iPhone 3GS, first released in 2009, as an entry-level handset, in addition to the iPhone 4, released in 2010, and iPhone 4S, which just launched in October.

DigiTimes, which has a hit-and-miss track record with Apple-related rumors, also believes that the iPad 2 will remain available at a discounted price in order to take on Amazon's $199 Kindle Fire.

With the reduction in iPad 2 orders, sources reportedly told the publication it is "still too early to tell" whether Apple plans to phase out the iPad 2, or keep it around following the launch of a third-generation iPad. "More observations need to be done in 2012 before the picture becomes clearer," the report said.



Apple has found great success in continuing to sell older iPhone models at discounted prices. As of August, the iPhone 3GS was still the No. 2 selling smartphone in America, and Apple is rumored to still be producing 2 million per quarter of the two-year-old handset, which continues to often outsell newer Android handsets.

Numerous rumors have suggested Apple plans to expand its iPad lineup in 2012, offering more models with different features at a number of price points, much like it already does with its MacBooks. The next iPad is expected to feature a high-resolution Retina Display like is already found on the iPhone and iPod touch.
post #2 of 32
Apple ostensibly (I think there's more to the story than what Cook said) messed this up last year, leading to lower iPad sales overall in 2011Q1. Interesting to see how they deal with it this time.
post #3 of 32
I would not be surprised if the quad-res iPad becomes the iPad HD (at a higher price premium) and the regular iPad remains.
post #4 of 32
Quote:
Originally Posted by Eriamjh View Post

I would not be surprised if the quad-res iPad becomes the iPad HD (at a higher price premium) and the regular iPad remains.



There would be ONE new model of iPad. The "regular" remaining would be the one model of iPad 2 that is kept at a lower price point. No way is Apple going to make TWO iPad 3's, one with 1024x768 and the other with whatever the resolution is. In every other story I just copy and paste from the article, since they seem to love to print it so much.

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post #5 of 32
Quote:
Originally Posted by AppleInsider View Post


Sources in Apple's supply chain told DigiTimes that orders for the iPad 2 are gradually dropping ahead of an anticipated third-generation iPad. While iPad 2 orders are being reduced, orders for the next iPad, reportedly set to launch in March of 2012, remain steady.

Wait a second. Sources told Digitimes that it was launching on Steve's birthday in Feb. oh wait no sources told Digitimes that it was launching at Macworld/iworld in January.

So which source talking to Digitimes are we to believe

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #6 of 32
Quote:
Originally Posted by Tallest Skil View Post



There would be ONE new model of iPad. The "regular" remaining would be the one model of iPad 2 that is kept at a lower price point. No way is Apple going to make TWO iPad 3's, one with 1024x768 and the other with whatever the resolution is. In every other story I just copy and paste from the article, since they seem to love to print it so much.

Don't get hung up on terminology. Your statement reminds me of the the complaints from the ones who said the iPhone 4S wasn't a real upgrade because it kept the iPhone 4 nomenclature.

IF there is an iPad with quad resolution screen (which I'm not convinced will happen this year), it wouldn't surprise me to see something like an iPad 2S which would have most of what the iPad 3 has (faster processor and more RAM, for example), but keeps the iPad 2 configuration otherwise. It could easily be similar to the current iPhone situation:

iPad 3 (whatever it's called) - quad resolution, faster processor, etc
iPad 2S or iPad 3 low res - same as iPad 3 but with current screen specs
iPad 2 - current model

Similar to the iPhone, there would be only one option in the lowest model (probably 16 GB). Maybe one or two configurations in the mid-range.
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post #7 of 32
I thought Apple was drawing down their iPad orders because they had over-ordered parts in the previous quarter? That was the report by AI last month.
http://forums.appleinsider.com/showthread.php?t=136097

Who to believe, AI or . . .
AI?
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post #8 of 32
Quote:
Originally Posted by charlituna View Post

Wait a second. Sources told Digitimes that it was launching on Steve's birthday in Feb. oh wait no sources told Digitimes that it was launching at Macworld/iworld in January.

So which source talking to Digitimes are we to believe

it's both. ANNOUNCED in late Jan, AVAILABLE on Steve's birthday. it's all just rumors and speculation, but i hope it's true. the sooner i can get my hands on a high-res iPad the happier i'll be.
post #9 of 32
Quote:
Originally Posted by desarc View Post

it's both. ANNOUNCED in late Jan, AVAILABLE on Steve's birthday.

So a month without any iPad sales because everyone's waiting for the new model. I don't think so. This is product creation 101, going back to 1977.

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post #10 of 32
Quote:
Originally Posted by Eriamjh View Post

I would not be surprised if the quad-res iPad becomes the iPad HD (at a higher price premium) and the regular iPad remains.

Paying $500 or more for a tablet seems like an outdated pricing structure by today's standards, where Kindle Fire's sell for $199 and Palm and Blackberry tablets are being fire-saled left and right for $99. I think it's time for a $299-$349 iPad 2 carry-over, with the $499 model living on as a quad-core beast with retina display. They can't keep asking $499 for the iPad 2 in 2012.

Regarding the article, if they do keep the iPad 2 around at discounted pricing, I imagine it'd be an 8GB model, like with the iPhone.
post #11 of 32
Quote:
Originally Posted by Cory Bauer View Post

Paying $500 or more for a tablet seems like an outdated pricing structure by today's standards, where Kindle Fire's sell for $199 and Palm and Blackberry tablets are being fire-saled left and right for $99.

No, that shows that people don't WANT them

Quote:
I think it's time for a $299-$349 iPad 2 carry-over

Makes ZERO sense when people are just fine paying $499.

Quote:
an 8GB model, like with the iPhone.

What is ANYONE going to do with an 8GB tablet?!

Originally posted by Marvin

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post #12 of 32
Quote:
Originally Posted by AppleInsider View Post

[...] Various reports have suggested that Apple will continue to sell the iPad 2 at a discounted price after it launches a third-generation iPad. [...]

This makes sense. A lower-priced 9.7" iPad 2 would reduce or eliminate the need for a smaller low-cost iPad. That would make it easy for developers to maintain their apps on the low-end model, with the same screen geometry that iPads have always had. And the new hi-res "iPad 3" would require a relatively simple 2x increase in graphics sizes. (That dual-resolution trick is already standard practice among iPhone developers for simultaneous support of the 3GS and 4/4S.)

But I don't think there will be a "free" iPad for at least a few years. The 3GS is "free" only because the carriers subsidize the purchase price. Same as with all cell phones. (And you still pay tax on the full unlocked price of all iPhones, subsidized or not. At least in the U.S.) Apple could easily knock $100 off the price of the previous year's iPad and $200 off the price of the 2-year-old iPad. They can do this because extending the life of each iPad model across multiple years allows Apple to amortize the development costs and factory equipment costs over multiple years. And they can also negotiate great component prices by doing multi-year high-volume deals with their suppliers.

Still, Apple will need to sell iPad unsubsidized for the next few years. Carriers don't have any need for pad computers. Not until real 4G is pervasive and reliable, which won't be for at least 2 or 3 years. (And no, LTE is not "real 4G." Not even close.) And I don't think Apple could clear their typical 30% - 40% margin on a $200 iPad. Not even on a 2-year-old model.

So how could Apple subsidize the purchase price of new and previous-gen iPads without the carriers' help? I think Apple's TV plans might extend far beyond just an Apple television set. If Apple can somehow leverage their TV (and movie) content provider deals to make it even easier for consumers to get content, then that might be the key. If Apple could figure out some way to leapfrog the cable TV, satellite TV, and broadcast TV industry, they could sell iPad (and the rumored Apple television) at a loss and make it up through content sales.

This is an ancient business model. Sell a product at a loss, then make money on consumable supplies for it. Schick did it with razors and blades. Polaroid did it with cameras and film. Amazon is doing it now with Kindle Fire and physical + digital retail sales. Apple could do it in the future with TV shows and movies.

I say "leapfrog" because I doubt that Apple would want to go head-to-head with the cable and satellite companies of the world. They wouldn't want to fight heavily entrenched competitors directly, especially not by using legacy technology. I think Apple is waiting for true high-speed pervasive wireless internet. The "real 4G" spec requires a minimum of 100 Mbit/sec for mobile devices and 1GBit/sec for stationary devices (like TV sets and computers.) But even 1GBit/sec isn't enough to deliver 1080p content. It will take a few updates of the "real 4G" before that's possible, which takes us out to at least 2015-2016. If we can get ultra-fast data speeds wirelessly, every device we own could independently receive data. No need for a wire or optical cable to the home. And that brings us back to the carriers again. Maybe 4G will give them a reason to subsidize iPad and other pad computers.

So maybe in a few years Apple could offer a "free" iPad with some kind of TV subscription plan and/or carrier subsidy. Who knows?

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post #13 of 32
Quote:
Originally Posted by Tallest Skil View Post

Makes ZERO sense when people are just fine paying $499.

By your logic, iPad 2 should have never been released; Apple should have just continued to sell the original iPad for $499 indefinitely

Quote:
Originally Posted by Tallest Skil View Post

What is ANYONE going to do with an 8GB tablet?!

With iCloud housing your music and tv shows, what can't you do with an 8GB tablet?
post #14 of 32
Quote:
Originally Posted by Cory Bauer View Post

By your logic, iPad 2 should have never been released; Apple should have just continued to sell the original iPad for $499 indefinitely

No, not in the slightest. I'd love to know how you came to that idea, though.

Quote:
With iCloud housing your music and tv shows, what can't you do with an 8GB tablet?

Hold all my stuff when I don't have access to iCloud, which would be nearly all of the time on the move using a proposed Wi-Fi 8GB iPad 2.

Originally posted by Marvin

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Originally posted by Marvin

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post #15 of 32
Quote:
Originally Posted by Cory Bauer View Post

Paying $500 or more for a tablet seems like an outdated pricing structure by today's standards, where Kindle Fire's sell for $199 and Palm and Blackberry tablets are being fire-saled left and right for $99. I think it's time for a $299-$349 iPad 2 carry-over, with the $499 model living on as a quad-core beast with retina display. They can't keep asking $499 for the iPad 2 in 2012.

That's insane logic. They're selling iPads as fast as they can make them at $499 to $829. Why should they cut the price?

And comparing the iPad to a Kindle Fire is rather silly. Not to mention comparing it to a close-out, discontinued product that no one wanted. But even so, TouchPads are going for $250-300 on eBay. That's for a device with no guaranteed future, questionable support, and very, very few apps. Given that, I don't see $499 for a high-demand premium product as being out of line.

Or are you continuing to insist that it's impossible for BMW to sell cars for $30-90 K when Chevy will sell you a car for $15 K?
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post #16 of 32
Quote:
Originally Posted by jragosta View Post

Don't get hung up on terminology. Your statement reminds me of the the complaints from the ones who said the iPhone 4S wasn't a real upgrade because it kept the iPhone 4 nomenclature.

IF there is an iPad with quad resolution screen (which I'm not convinced will happen this year), it wouldn't surprise me to see something like an iPad 2S which would have most of what the iPad 3 has (faster processor and more RAM, for example), but keeps the iPad 2 configuration otherwise. It could easily be similar to the current iPhone situation:

iPad 3 (whatever it's called) - quad resolution, faster processor, etc
iPad 2S or iPad 3 low res - same as iPad 3 but with current screen specs
iPad 2 - current model

Similar to the iPhone, there would be only one option in the lowest model (probably 16 GB). Maybe one or two configurations in the mid-range.

You could be right, but I don't think its likely.
Apple likes simplicity and it makes sense to sell the iPad2 for a lower price. And that can only be done with the current model. A new model takes time (and money) to develop and has the risk that something goes wrong. Also newer chips (A6) will be in short supply and are not needed because of the lower resolution (it's probable that the new iPad 3 is as fast as the old one because it needs to be a factor four faster to 'do the same').
So the iPad 2 is perfect for the job.

J.
post #17 of 32
Quote:
Originally Posted by Tallest Skil View Post

No, not in the slightest. I'd love to know how you came to that idea, though.

I suggested the iPad 2 should sell at $299-$349 in 2012, below an iPad 3; you said that made no sense because people are paying $499 for them today. Which implies that they should simply continue to sell the iPad 2 at the current price so long as people buy them. Follow that train of thought back a year, and your same argument could have been made against releasing the iPad 2 and discounting the remaining stock of original iPad's to $349. So long as people will pay the current price, why ever release anything new, ever?
post #18 of 32
Quote:
Originally Posted by Cory Bauer View Post

I suggested the iPad 2 should sell at $299-$349 in 2012, below an iPad 3; you said that made no sense because people are paying $499 for them today. Which implies that they should simply continue to sell the iPad 2 at the current price so long as people buy them. Follow that train of thought back a year, and your same argument could have been made against releasing the iPad 2 and discounting the remaining stock of original iPad's to $349. So long as people will pay the current price, why ever release anything new, ever?

That's outlandishly silly. I can see where you got the first sentence or so, but the rest is all you.

$299 is laughable in the face of $399, is what I meant.

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post #19 of 32
Quote:
Originally Posted by jragosta View Post

That's insane logic. They're selling iPads as fast as they can make them at $499 to $829. Why should they cut the price?

Because they'll soon have a new model to fill that $499 to $829 tablet category. There are people who are deciding that at $199, the Kindle Fire (or some other tablet sold on clearance) is "good enough" and that a $499 iPad is more tablet than they would ever need. If Apple wants to maintain its dominant hold on the tablet market, parking an 8GB iPad 2 at the $299 price point would lure most if not all of those Kindle Fire buyers. Who's going to buy a 7" Fire for $199 when a 9.7" iPad - a real tablet - can be had for just $100 more?

Quote:
Originally Posted by Tallest Skil View Post

That's outlandishly silly. I can see where you got the first sentence or so, but the rest is all you.

$299 is laughable in the face of $399, is what I meant.

$399 doesn't get them any new customers. $299 does. And the price is not impossible; Apple was clearing out original iPad stock at $349 last year. By cutting the storage to 8GB (like the entry-model iPhones), $299 should be achievable. And being just $100 more than a 7" Kindle Fire would ensure very few customers opt for a less expensive alternative to the iPad.
post #20 of 32
Quote:
Originally Posted by Cory Bauer View Post

Because they'll soon have a new model to fill that $499 to $829 tablet category. There are people who are deciding that at $199, the Kindle Fire (or some other tablet sold on clearance) is "good enough" and that a $499 iPad is more tablet than they would ever need. If Apple wants to maintain its dominant hold on the tablet market, parking an 8GB iPad 2 at the $299 price point would lure most if not all of those Kindle Fire buyers. Who's going to buy a 7" Fire for $199 when a 9.7" iPad - a real tablet - can be had for just $100 more?


$399 doesn't get them any new customers. $299 does. And the price is not impossible; Apple was clearing out original iPad stock at $349 last year. By cutting the storage to 8GB (like the entry-model iPhones), $299 should be achievable. And being just $100 more than a 7" Kindle Fire would ensure very few customers opt for a less expensive alternative to the iPad.

I'm with you on this one. Ars is reporting that Amazon sold 4 million Kindles in December. While they didn't break out how many sold were Fires I think its safe to assume that its not an insignificant number. I bet a $299 iPad 2 would blunt the sales of the Fire.... and fast too.

It would also give MS quite a bit of heart burn as well with Win 8 coming out sometime in 2012. That would make it much more difficult for Win 8 tablets to gain traction.
post #21 of 32
Quote:
Originally Posted by Cory Bauer View Post

Who's going to buy a 7" Fire for $199 when a 9.7" iPad - a real tablet - can be had for just $100 more?

No one who was going to buy the Fire anyway

Quote:
$399 doesn't get them any new customers. $299 does.

How in the world do you think you can say that? Particularly when they're already getting tens of thousands of new customers at $499 EVERY MONTH.

Quote:
By cutting the storage to 8GB

AGAIN coming back to what is quite possibly a meaningless use case.

Originally posted by Marvin

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post #22 of 32
Quote:
Originally Posted by backtomac View Post

I'm with you on this one. Ars is reporting that Amazon sold 4 million Kindles in December. While they didn't break out how many sold were Fires I think its safe to assume that its not an insignificant number. I bet a $299 iPad 2 would blunt the sales of the Fire.... and fast too.

It would also give MS quite a bit of heart burn as well with Win 8 coming out sometime in 2012. That would make it much more difficult for Win 8 tablets to gain traction.

Right. The Kindle Fire is a real contender for market share, even if Amazon actually loses money on every one sold. If the iPad 3 packs a quad-core A6, Retina Display and 16GB of storage for $499, then $200 less seems like the right price for an iPad 2 with all of those specs cut in half.
post #23 of 32
Quote:
Originally Posted by Tallest Skil View Post

No one who was going to buy the Fire anyway

People aren't buying the Fire because they prefer it over an iPad; they're buying the Fire because they can't justify spending $499 on a tablet because as much as they want one, so much of what it does is redundant with devices they already own. The Kindle Fire's price also puts it in the gift-giving price range; $200 is likely the average gift expenditure for middle-class families. Only the rich give $500 gifts. A $300 iPad would make it obtainable/justifiable for many more people. People who are settling for Fire's and discounted Playbooks/Touchpads.

Quote:
Originally Posted by Tallest Skil View Post

How in the world do you think you can say that? Particularly when they're already getting tens of thousands of new customers at $499 EVERY MONTH.

And they will continue to do so with the iPad 3; an iPad 2 sold for close to $300 would ward off the bottom feeders like the Kindle Fire that will otherwise continue to chew away at iPad's market share.

Quote:
Originally Posted by Tallest Skil View Post

AGAIN coming back to what is quite possibly a meaningless use case.

Please explain why an 8GB iPhone is perfectly acceptable (Apple has two in their line-up), but an 8GB iPad would be useless?
post #24 of 32
Quote:
Originally Posted by Cory Bauer View Post

Right. The Kindle Fire is a real contender for market share, even if Amazon actually loses money on every one sold. If the iPad 3 packs a quad-core A6, Retina Display and 16GB of storage for $499, then $200 less seems like the right price for an iPad 2 with all of those specs cut in half.

I'd really like to see 16 gbs of flash for that machine at that price but I'm not sure Apple could manage that price. Then again 16 gbs of flash ought to cost what 8 gbs of flash cost 2 years ago when the original iPad came out.
post #25 of 32
Quote:
Originally Posted by Cory Bauer View Post

People aren't buying the Fire because they prefer it over an iPad; they're buying the Fire because they can't justify spending $499 on a tablet because as much as they want one

And so they go running back to the iPad once they realize how much those other cheap tablets suck.

Quote:
$200 is likely the average gift expenditure for middle-class families.

Got the data on that?

Quote:
Only the rich give $500 gifts.

Uh huh.

Quote:
And they will continue to do so with the iPad 3; an iPad 2 sold for close to $300 would ward off the bottom feeders like the Kindle Fire that will otherwise continue to chew away at iPad's market share.

That doesn't answer the question.

Quote:
Please explain why an 8GB iPhone is perfectly acceptable (Apple has two in their line-up), but an 8GB iPad would be useless?

The mindset that allows you to ask that question cannot reasonably be expected to understand the answer. This is because a mind contained within a situation of paradox cannot possibly comprehend the paradox inherent within it.

Originally posted by Marvin

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Originally posted by Marvin

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post #26 of 32
Quote:
Originally Posted by jragosta View Post

Don't get hung up on terminology. Your statement reminds me of the the complaints from the ones who said the iPhone 4S wasn't a real upgrade because it kept the iPhone 4 nomenclature.

IF there is an iPad with quad resolution screen (which I'm not convinced will happen this year), it wouldn't surprise me to see something like an iPad 2S which would have most of what the iPad 3 has (faster processor and more RAM, for example), but keeps the iPad 2 configuration otherwise. It could easily be similar to the current iPhone situation:

iPad 3 (whatever it's called) - quad resolution, faster processor, etc
iPad 2S or iPad 3 low res - same as iPad 3 but with current screen specs
iPad 2 - current model

Similar to the iPhone, there would be only one option in the lowest model (probably 16 GB). Maybe one or two configurations in the mid-range.

Not disagreeing but maybe keeping it simple is better. New model when it comes at quad res, lower price previous model for a while ...

A small part of me would love to see an older iPad at Kindle Fire prices just to stir the proverbial ...
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post #27 of 32
Partial Quote:
Quote:
Originally Posted by Cory Bauer View Post

Only the rich give $500 gifts.

Ever heard of saving up?
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post #28 of 32
Quote:
Originally Posted by Cory Bauer View Post

Only the rich give $500 gifts.

I'm FAR from rich, but I managed to come up with enough for an iPad 2 for my wife for Christmas. Another fellow I work with bought both of his kids their own iPads this year. Neither of us are anywhere near the famous 1%, but we were able to do it. I seriously doubt we were the only 2 working class stiffs to have a little financial discipline leading up to this past holiday season.
post #29 of 32
Mmmm...here's a product line up I'd like to see:

$728/$829/$929 iPad 3 4G A6 16GB/32GB/64GB quad rez
$599/$699/$799 iPad 3 A6 16GB/32GB/64GB quad rez

$529 iPad 2 3G 16GB
$399 iPad 2 16GB

$299 5" iPod Touch 8GB A5 960x640
$99 5" iPod Touch 8GB A5 3G 960x480 on contract for 2 yr $25/mo data plan

<current iPod touch lineup>

Yes, the base price for the current model gets bumped $100 because frankly I think the yields on the quad rez displays will be low and to offset the ASP hit from the lower entry price point to combat the pressure from lower priced android tablets.

The iPod touch needs some kind of refresh and I think a 3G model with a larger size would appeal to many.
post #30 of 32
Quote:
Originally Posted by F1Ferrari View Post

I'm FAR from rich, but I managed to come up with enough for an iPad 2 for my wife for Christmas. Another fellow I work with bought both of his kids their own iPads this year. Neither of us are anywhere near the famous 1%, but we were able to do it. I seriously doubt we were the only 2 working class stiffs to have a little financial discipline leading up to this past holiday season.

The average American family was expected to spend $646 total for all gifts this Holiday season. Dropping $500 on one single one does seem to me a bit over-budget for a typical middle-class buyer.

http://americanresearchgroup.com/holiday/
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post #31 of 32
Quote:
Originally Posted by Gatorguy View Post

The average American family was expected to spend $646 total for all gifts this Holiday season. Dropping $500 on one single one does seem to me a bit over-budget for a typical middle-class buyer.

http://americanresearchgroup.com/holiday/

So? For internet shoppers the average was $714. Even at $646 it could easily break down into Mom buying "Dad" an iPad 2 for $500 and $50 each for mom and the two kids with the understanding that "Dad's" iPad is for the whole family.

Would 2 Kindles be better? It depends on which app ecosystem you're already in.
post #32 of 32
Quote:
Originally Posted by nht View Post

So? For internet shoppers the average was $714. Even at $646 it could easily break down into Mom buying "Dad" an iPad 2 for $500 and $50 each for mom and the two kids with the understanding that "Dad's" iPad is for the whole family.
.

I'm sure that there are some families with $600 or $700 budget that will go ahead and get an iPad. But I'll bet there are plenty who simply won't. Just who do you think bought those 4 million Kindles in December?

If they sell the iPad 2 at $399, that will help quite a bit. It would be even better if they could get down to $299. The iPad 2 is still a very capable tablet and should be for some time. It would be insane to just discontinue it once the iPad 3 is available. (I'm not saying that you are suggesting this) Apple need a tablet to fill the space between the Fire and the $499 entry level iPad. Thats a pretty big void that someone will exploit if given the chance.

This whole debate reminds me of the debate that raged here about Apple selling iPhones on other networks. Many here said Apple didn't need VZ, Sprint or TMobile and were doing just fine. I and others argued that it was helping Android gain momentum and would hurt Apple in the long run. Even while iPhone still enjoys a growing market share, Android has apparently gone over 50% market share. I don't know that if the iPhone was available earlier on VZ or Sprint it would have changed this but one certainly has to wonder. My point is that Apple seems to now have a somewhat credible competitor in the tablet space with the Kindle Fire. They should not be so slow to respond to it IMO.
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