$299 iPad 2 seen shaking up tablet market, Amazon's Kindle Fire - Page 3

Originally Posted by GregInPrague

What is this? Where did it come from? Without more info this image is meaningless.

Originally Posted by Ireland

I don't know about that.

Originally Posted by Cory Bauer

Do you really believe an 12-month old iPad with 1024x768 screen/dual-core A5 chip should only be $100 cheaper than a brand new iPad with 2048x1536 screen/Quad-core A6 chip?

Originally Posted by ElectroTech

I agree. Just recently, we saw the cost of components and manufacturing for the iPad 2. It was around $281 or something wasn't it? So this analyst figures Apple will make $8 on each one and pay their sales team too?

Originally Posted by pmz

No one does, but look how well it's worked for Apple with the iPhone 3GS. It's 2012, and that product originally released in 2009 is still around still available and at an unbeatable price. I numbers recently showing Apple selling more 3GS during the time of $99 > $49 > $Free > $1 than they ever did while it was the headlining iPhone at $199 and $299.

The 3GS was the perfect device to make into a lost cost iPhone, and it's now been on sale for 3 years.

Come March will only be one year the iPad 2 has headlined. Time to begin tackling the low price range, slowly but surely. iPad 2 for 2012 will keep its 16 GB WIFI model (there will NOT be an 8 GB) and will continue to sell as the entry level iPad at $399. A great deal if you ask me. The iPad 3 will be the main event and will push out at the same storage capacities and and same prices with no changes to those aspects whatsoever. I always feel like its possible that "this time" there could be 128 GB iPad, but with iCloud there is simply no reason for one, so I think Apple will wait until their Anobit purchase pays off and they can pump out high-capacity SSD at rock bottom prices.

And then next year, iPad 4 in 2013, will be a spec bump over iPad 3, same prices and storage, but with 1 model of the iPad 3 remaining at $399, and possibly "for a limited time" iPad 2 remaining inventory available at $299. If Apple sees any advantage at that point, they'll decide whether to keep producing new iPad 2 to sell at that price.

Possibly, in 2013 they may even introduce a 4G iPad for FREE with a 2 year 4G service agreement. I would absolutely buy one of those in 2013.

Originally Posted by Kevin Winsness

People need to realize the Kindle DOES NOT offer the same experience as the iPad! It is a cut rate product that doesn't even come close to Apple's product!

Originally Posted by jragosta

EVEN IF iSupply's estimate of $281 for parts is correct, that doesn't mean that Apple makes $18 by selling them at $299.

The component cost is only part of the total manufacturing cost. You have to add in:
- Labor
- Manufacturing overhead (facilities, lighting, electricity, insurance, etc)
- Shipping
- Labor overhead costs (taxes and, in China, dormitories)
- Quality inspection
- Rework
- Rejects
- Tech support costs
- And more
As a very rough guess, if the component cost is $281, I would venture that the total manufacturing cost would be in the $350-375 range.

And that's only the direct manufacturing costs. Add in R&D, marketing, and selling costs before Apple makes a profit.

Now, of course, many (if not most) of the components are probably less expensive today than they were when that estimate was done, so it's probably not a very useful estimate, anyway.

Originally Posted by AppleInsider

Though Apple already dominates the tablet market, the company could ward off growing competition and increase its sales even further by selling the iPad 2 for as low as $299, one analysis has projected.

The new take from Taiwanese industry publication DigiTimes offered on Tuesday projects that Apple will keep its current iPad 2 available after it launches a third-generation iPad in the coming months. At most, it projects that the iPad 2 price will drop to $399 for the entry-level model, which would be $100 less than the current cheapest model, and would be a strategy similar to what Apple has employed with its iPhone lineup.

But Apple could be even more aggressive and price the iPad 2 even less, potentially at $349 or even as low as $299, the analysis concluded. A $299 iPad 2 is seen "seriously" affecting Apple's tablet competitors, including the Amazon Kindle Fire, which has created a new low-end tablet market with its $199 price.

In addition to an iPad 2 as inexpensive as $299, Apple could also grow the iPad range upwards, the report said. The same publication reported last month that Apple will launch a new high-end iPad model with an 8-megapixel camera and high-resolution Retina Display, along with a mid-range model equipped with a 5-megapixel camera.

But that report also claimed that Apple would unveil the two new iPad models at the MacWorld | iWorld conference later this month, an event that Apple has not participated in since 2009. The claims of a so-called "iPad 3" unveiling at MacWorld were quickly debunked by more reputable reports.



It was also said last month that Apple has begun reducing orders for the iPad 2, but added that it was "too early to tell" whether the 2011 tablet would continue to be sold at a discounted price. The prospect of a new entry-level model has been seen by analysts as a way for Apple to counter the Kindle Fire, which Amazon is believed to be selling for a loss in order to push digital content to users.

Originally Posted by Thorntondw

It doesn't matter, they are buying it because it costs 40% of the lowest price iPad. I don't think Tim Cook wants to just give that very large market to Amazon. I think we will see the iPad2 (as is but with 8gb storage) when the iPad3 is introduced. With iCloud you really don't need more than 8gb unless you have extraordinary requirements.

The only question is what price pint will Apple choose, $249 or $299. Anything higher won't attract the Kindle Fire/Nook Color/Android customers.

Originally Posted by Cory Bauer

Do you really believe an 12-month old iPad with 1024x768 screen/dual-core A5 chip should only be $100 cheaper than a brand new iPad with 2048x1536 screen/Quad-core A6 chip?

Originally Posted by Thorntondw

I am looking for a $299 (or, if it is at all possible, $249) iPad2 with 8gb storage. This would appeal to the Kindle Fire/Nook Color segment that would otherwise never consider the iPad. Would you buy an iPad2/8gb wifi for $249 instead of a $199 Kindle Fire or $249 Nook Color? I don't think the Kindle Fire or Nook Color could sell in that scenario.