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With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

Summary: The iPad 3 rumor mill is churning furiously now, but what will be the fate of the iPad 2 when Apple's latest tablet inevitably drops?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.

Sean Portnoy

By for Laptops & Desktops |

The iPad 3 rumor mill is churning furiously now, but what will be the fate of the iPad 2 when Apple's latest tablet inevitably drops?

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.

Topics: Apple, iPad, Mobility

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Talkback

40 comments
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  • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

    Unless one of those iPads is a 7" model I don't see any reason to get it.
    marbo100
    Reply Vote

    • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

      @marbo100 Wow! The iPad 3 has me really excited, can't wait til it comes out! I just read the leaked feature list and full specifications for the new iPad, and I must say they're pretty amazing.

      If you guys want to check out the leaked iPad 3 information, just check the link below -

      http://ipad3leak.com.nu
      SincerelyHis
      Reply Vote

  • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

    the horse is out of the barn. there is no profitable competition. salvation for the competitors will happen if they can out-innovate Apple ( a tall order!) but this market belongs to Apple for the next 2-3 years, I think. meantime, the shift undermines the desktop and other markets in unpredictable ways we can only see after they happen. interesting period we are in, no?
    macgregor@...
    Reply Vote

    • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

      @macgregor@... Out-innovate? What can the iPad do that the others cannot? There are more varieties in style and power outside of Apple. And they can all do Flash (yeah, cheap shot). Apple doesn't even want to do colors like they did long ago. Apple has two things keep it selling: 1) mass MASS marketing, which is where your money goes when you buy an iProduct; and 2) the Cult of Jobs, who singlehandedly made followers believe his products were the end-all-be-all of computing. Both of these things are not sustainable indefinitely.
      myangeldust
      Reply Vote

      • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

        @myangeldust You got to be kidding. iPad has an undeniable software and ecosystem advantage, at the very least. Androids don't even have gyros or position sensors, etc??? necessarily (Kindle fire, etc???)

        All that Android 'tablets' can do is COPY the iPad, badly. And yeah, Apple has ALL the innovation here. This is not to say they discovered all the principles that go into an iPad (the 'tablet' that was finally done right, that eclipsed literally every other 'tablet' that had ever come before--and all of which flopped miserably).

        Get your facts straight, or maybe lay off the dust for awhile.

        Varieties get you NOTHING. All that variety, and it all runs under ONE horribly fragmented rip-off of an OS that is trying to be like iOS, but leaving out the developer environment, APIs, etc??? LOL
        comp_indiana
        Reply Vote

      • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

        @myangeldust
        You forgot possibly the most important aspect of all - ease of use. My wife and her brothers wanted a tablet for their mother for Christmas, but thought the iPad was too expensive. Lucked into a deal on a Lenovo K1 for $239 when the store was closing them out. Got it home, and it worked fine...but nothing was intuitive. No clear way to close apps, without going into the setting menu and using the app manager. Tried downloading pictures and video clips from facebook...no option to 'save', just share, post, etc. After a week of trying to get things configured, we knew there was no way that my mother-in-law would attempt to use it, so it would be a waste of money to give it to her. Bit the bullet, spent another $250 for the iPad2, and she has been using it non-stop.

        Yes, I know that I could have eventually got things working the way I wanted, but the beauty of tablets was that they simplify using a computer...and after a week I know which choice I'd make if I were shopping for a tablet.
        EricP_KY
        Reply Vote

      • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

        @myangeldust So based on your post your idea of innovation is using colors and Flash. I hope you don't run a company and have people reliant on your for their livelihood. As far as your two things that keep Apple selling, those are common talking point responses used by somebody with no facts to back up their hatred. By the way, marketing only gets you so far and the iDevices have all gone well beyond that point. It's customer satisfaction that keeps the sales going.
        non-biased
        Reply Vote

  • Never seen Apple drop a price so low?

    Are your dreaming? I have never seen Apple drop a price so low. I bought a iPad 1 when the iPad 2 came out. It was $350 I believe for a short time on the refurb side of the Apple store. But it never lasted too long then it was back up to $399. I think Apple is very goos at inventory control. I doubt unless they had a really bad holiday sales season that they have a lot of iPad 2's to get rid of. If indeed a iPad 3 is just around the corner.
    jscott418-22447200638980614791982928182376
    Reply Vote

  • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

    I sure hope so!
    dveed@...
    Reply Vote

    • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

      @dveed@??? Personally, I doubt it. But they have all the money to do it if they want to really put a hurt on the copy cats like Android, Samsung, etc??? Something tells me that Apple could also do a loss-leader. Just because they have never had to do it before, doesn't mean that they won't do it here. The iPad market is kinda important (and it's not a 'tablet' market at all, yet.)
      comp_indiana
      Reply Vote

  • Posted in wrong place

    .
    A Grain of Salt
    Reply Vote

  • Apple is not like other vendors ... volume is less important than profit

    Whenever Apple releases a new version of a device, the new version comes out at the same price as the old but with enhancements (new features, more storage, higher resolution, etc.).

    Apple does not care to compete with low-margin, high-volume competitors. Why should they? Whey they decide to announce a new product, they will wait until their inventory on the old version is low enough to absorb the loss and then they will offer a modest price-cut (such as the $100 price-cut mentioned above) but they will not try to steal market share from Amazon, or anyone else selling on razor-thin margins. In the end, Apple does not leave money on the table in order to improve market share. That is a no-win scenario for Apple and Steve Jobs knew that. It remains to be seen whether Tim Cook understands that or not, but if he doesn't, we will be initiating a long, slow, downward spiral for Apple.
    M Wagner
    Reply Vote

  • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

    There may not be a single manufacturer selling as many tablets as Apple, however collectively Android Tablets are putting quite a dent in Apple??s potential sales. Just like the old days when Apple compared sales to IBM and the market was a whole lot more than IBM, now the Android market is a lot bigger than Samsung. Apple must compete. It is because of this pricing that Apple with their great OSs and ??think Different??attitude has never been the real winner an any market. Maybe they hope to change this by offering a low end tablet that can offer an alternative with 200 dollar android tablets. The iPads are nice however there again there is the fact that few good free apps exist for IOS as on Android, and especially in this day and age, price is an impoortant consideration.
    markosjal@...
    Reply Vote

    • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

      @markosjal@... I think, as in everything else, it will come down to "Do I want to save up for the mystique of an iPad?" or "Do I want an affordable tablet that works for me?" The Android tablets have shown some interesting OS screens on affordable hardware.
      myangeldust
      Reply Vote

      • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

        @myangeldust Just because you are willing to settle for a non-iPad iPad, doesn't mean any appreciable number of other people will. So far, they haven't really.

        I think this is the case with Androids in general. Lots of people buying them, but not many apps being sold, not much internet usage. I guess there is social pressure either to have an iPad/iPhone, -OR- to somehow try to prove to everyone that there is a credible alternative (even though there really isn't).
        comp_indiana
        Reply Vote

    • In terms of market share, this might be true BUT ...

      ... Apple doesn't care about market share. Apple has to have $499 for their baseline tablet, just as they have to have $999 for their baseline MacBook. They must be profitable and they do not have the capacity to trim their margins and make it up on volume.

      Amazon can sell the Kindle Fire at a loss because they can make it up on subscriptions to Amazon Prime. Apple has no such luxury

      In the end, there may be lots of pent-up demand for $100-$200 tablets (as evidenced by the HP TouchPad fire-sale and the success of the Kindle Fire) but Apple cannot afford to compete at those price-points.
      M Wagner
      Reply Vote

    • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

      @markosjal@... Somebody has been sharing their angel dust with you haven't they ;-)
      non-biased
      Reply Vote

  • $199 ???? They would sell out in about 10 minutes.

    If you weren't sitting at your computer, ready to order, when the new price was announced you would be out of luck. An iPad is far superior to a Kindle. In my mind they can't even be compared. If iPad were to be priced anywhere near Kindles, the sale of Kindles would likely halt.
    stevethehawk
    Reply Vote

  • Why Apple has no incentive to cut prices

    I don't think Apple will drastically slash prices on iPad 2 or the new iPad 3. In fact, my guess is that they'll establish a new higher base price point for the iPad 3, and maybe lower the price on iPad 2 a little.<br><br>The reason is that the way the tablet "wars" are looking, the competition is not all about the hardware. In fact, it's mostly about the software. Particularly the OS.<br><br>As an owner of both an Android tablet and an iPad, I can say the available apps are mainly similar. In fact, Android gets a slight edge for having better multi-tasking.<br><br>However, the Android tablet is nearly unusable for basic Web browsing when compared to the iPad 2. It is a painful experience, as the display constantly stutters and blanks out as you try to do something as basic as scrolling. Pages appear buggy and distorted as the display attempts to juxtapose Flash ads and content next to regular HTML content.<br><br>Since a large amount of tablet usage (perhaps the majority of usage) is simple Web browsing, the iPad crushes Android tablets most of the time.<br><br>From what I have read, the problems boil down to some fundamental flaws in the way Android treats the priority of display updates in the OS. Rather than giving hardware acceleration priority when the user scrolls, Android keeps updating background stuff, even as the user attempts to scroll the page. The result is that the content of the page updates in real-time on Android -- but at the expense of a painfully jittery and glitchy browsing experience.<br><br>There is also one particular hardware issue that all Android tablets seem to share, and that's the display ratio. The iPad's 4:3 screen ratio is just perfect for a great portrait or landscape orientation, but Android's typical 16:9 screen ratio is uncomfortably narrow in portrait mode, which is how the best Web browsing is done on a tablet. Even if you switch to landscape, the tablet display becomes too wide and short for optimum Web browsing.<br><br>I have no idea why Android device makers refuse to use a 4:3 ratio, other than the fact that it is cheaper to use more plentiful 16:9 displays.<br><br>Incidentally, the other tablet I have is an HP TouchPad, which uses a 4:3 ratio, and it does make a better Web browsing tablet than the Android tablet. When you factor in the ability to easily overclock the TouchPad processor using PreWare, the TouchPad makes for a MUCH better browsing experience than the Android.
    Speednet
    Reply Vote

    • RE: With iPad 3 launch, will Apple drop lowest iPad 2 price to $299 -- or lower?

      @Speednet You are absolutely correct!
      paulric51@...
      Reply Vote
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