The first-generation iPad got a $100 price cut until units ran out when the iPad 2 was released, but that was when there was basically no competition for the Apple tablets. Now at least the Kindle Fire with its $199 price tag is selling in the millions, and Amazon promises a new version soon.
Apple could make a couple of moves to blunt the Kindle Fire's growth. According to DigiTimes, there may be two different flavors of iPad 3 -- a higher-end model with "retina display" and a lower-tier one with a similar display to the iPad 2. It's certainly possible that the version with the higher-resolution screen will be priced at $499, with the other model starting at $399. But the price difference between $199 and $399 is still steep, so Apple could then drop the iPad 2 price to $299 to fill in that gap. At this point, there are plenty of people who won't need the iPad 3's new bells and whistles and could gladly scoop up a iPad 2 for $299.
But would Apple get even more aggressive? After all, the iPad 2 supply could be limited, and once they're gone, then its cheapest slate would only be $399, which more Android tablet makers can match (like the Sony Tablet S). Could the company drop the iPad 2 price all the way to $199 to match the Kindle Fire and then charge $299 for the new entry-level iPad 3?
As smartphone competition heated up, Apple was aggressive in slashing prices for its iPhones. Do you think it will be equally aggressive with its iPad pricing in 2012? Let us know your thoughts in the Talkback section.