'Mini' iPad 3 and a 'cheap' iPad 2 - Don't bet on it

'Mini' iPad 3 and a 'cheap' iPad 2 - Don't bet on it

Summary: Oh, where to begin the debunking?

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With the expected unveiling of the iPad 3 less than a week away, it is now silly season for iPad-related rumors and nonsense.

The pick of the crop today comes to us via Digitimes.

Oh, where to begin the debunking?

We can just dismiss the 7.85-inch iPad story straight away with just pure logic. Why would Apple make an iPad that's less than two inches smaller than the current offering? That just doesn't make any sense. A 7-inch tablet would make some sense (since it would complete directly with Amazon's Kindle Fire). But even that doesn't make much sense given that small tablets are not for everyone, because the user interface elements are too small and content isn't optimized for a screen that's bigger than a smartphone yet smaller than the iPad.

Also, can someone please tell me what's so special about 7.85 inches?

OK, but what about the 8GB iPad 2 rumor? After all, Apple's had quite good success with selling the older version of the iPhone at a cheaper price. But there's one thing that Digitimes (or its source) didn't factor into the equation, and that is that the older versions of the iPhone are only cheap because the carriers subsidize them.

An unsubsidized iPhone 4 still costs $549, but if you buy it from AT&T, Sprint or Verizon, it costs you $99. The same is true of the ‘free' iPhone 3GS. Buy that one from AT&T and it is $0, but buy an unlocked one and you'll pay $375.

Unless Apple somehow plans to get the carriers on-board to subsidize the cost of an iPad, then there is going to be no such thing as a cheap iPad 2 because there won't be enough of a price gap between the two devices. Even if the storage is dropped to 8GB, this makes little difference since the difference in supply chain costs between 8GB and 16GB of NAND flash storage is going to be less than $10.

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Topics: Mobile OS, Software, Smartphones, Mobility, Apple, Laptops, iPad, Hardware, Enterprise Software, Tablets

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8 comments
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  • 7" device

    "A 7-inch tablet would make some sense (since it would complete directly with Amazon???s Kindle Fire). But even that doesn???t make much sense given that small tablets are not for everyone"

    So if it's not "for everyone" then Apple's not going to make it?

    That doesn't make much sense.

    Here's my take on the 7" rumor:

    CON: Apple probably won't make a 7" tablet because a 4:3 aspect ratio doesn't make much sense for a small tablet. 7" tablets feel much more natural as 16:9 devices. But in doing so Apple would begin to create fragmentation within the iOS market with a 3:2 ratio iPhone, a 4:3 ratio iPad and 16:9 ratio iPad mini. App developers would have to take all three screens into consideration when developing their wares.

    PRO: The 7" form factor has proven very popular with Android tablets. A 7" device is small enough to toss into a purse or jacket pocket without adding much weight, and at the same time, reading a book or surfing the web on a 7" screen does not feel like reading the joke comic printed on the wrapper of a stick of Bazooka bubble gum. And right now, Apple's got nothing to compete in that market. And if there's one thing that the new improved Apple Computer has shown it's that they have learned from the mistakes of the past and are not going to make the same mistakes that saw the Windows OS overtake the Mac OS back in tha 1980's.
    dsf3g
  • On the bearable lowering of costs

    Comparing unsubsidized prices for different iPhones would be a very convincing argument if the iPhone 3GS had the same cost as back when it was the new shiny.

    Here's why a year old iPad 2 can cost Apple less. A higher resolution display on the new one means the biggest customer for the standard resolution screens just reduced demand. By setting a higher feature set for the most popular model, competitors who go the spec route are also abandoning standard resolution. If any of the iPad 3's components are better, the demand for the 2's components dropped and the price went down.

    Apple has established the factories already, and production ramp up costs are paid.

    Apple may reduce the number of iPad 2 configurations, and this saves money in manufacturing.

    With a hit product, and the iPad 3 will be one, Apple can take less margin on the 2, in some sense subsidizing it, because Apple would like to pick up, at this point, the customer for whom the iPad 2 wasn't good enough as well as the customer for whom the iPad 2 was too expensive.

    The price is going to fall eventually and everyone feels that the low-end iPad is too expensive for school. How does Apple support it's textbook aspirations except somehow the entry level iPad comes down from 500?

    If Apple doesn't use an old iPad configuration to establish a new lower tier this year, it will happen. Just look at what they did with iPods and iPhones
    DannyO_0x98
    • Apple won't need to take less of a margin on the iPad 2, even at $399

      "Apple can take less margin on the 2, in some sense subsidizing it"

      Component prices will have dropped significantly over the past year, so Apple's margins on a 8GB $399 iPad 2 will remain at almost the exact same level as when it 2 was released for $499. If the iPad 3 does indeed have 4G and a retina display, there's a good chance Apple will have a lower profit margin on it than the reduced-price iPad 2.
      Johnny5k
  • Cheaper Ipad?

    Did Apple lower the price of the first Ipad?
    Capo82
  • 7.85 Inches

    if like the entire world, we in the USA used the metric system that would be a 200MM tablet. lets get with the rest of the world shall we.
    jonpolliard
  • None of these "No cheap 8GB iPad" arguments make sense.

    "the older versions of the iPhone are only cheap because the carriers subsidize them."

    Wha?! Carrier subsidies have nothing to do with the lower prices of the older versions of iPhones. In the case of the iPad, there are no carrier subsidies, and never have been; so dropping the price of the iPad 2 by $100 would be exactly the same as it was with both of the previous iPhone releases. The iPhone 4 went from 16GB for $199 to 8GB for $99 when the 4S was released. It dropped by $100 & 8GB - the carriers' subsidies probably stayed exactly the same, and Apple's profit margin probably stayed about the same as well due to cheaper component prices.

    "Even if the storage is dropped to 8GB, this makes little difference since the difference in supply chain costs between 8GB and 16GB of NAND flash storage is going to be less than $10."

    If Apple does release an 8GB iPad 2, the limited storage won't be so much about cheaper component prices as it is about differentiating the products. Someone might be happy with a $399 iPad 2, but not the limited 8GB storage, so they'd move up to the iPad 3. The same as with the iPhones. And as I mentioned, it's not as though the smaller flash chip is the only component that's going to be cheaper in the iPad 2 than the iPad 3 because of cheaper/older components, so even if Apple drops the price of the iPad 2, they'll probably still be able to enjoy a profit margin close to the same as they were when they first release it for $499 and component prices were still high.

    "...there is going to be no such thing as a cheap iPad 2 because there won???t be enough of a price gap between the two devices. "

    Not enough of a price gap?! $399 for a 8GB iPad 2, or $499 for a 16GB iPad 3 (w/4G & retina-display) is a HUGE price gap - a lot of people who don't need 4G, the retina display, or the extra storage (like schools' for instance) would go crazy buying iPad 2's for under $400, while professionals & tech-junkies will happily pay up for the newest features. It's a win-win for Apple, their customers, and their shareholders.
    Johnny5k
  • im really confused

    between waiting for the new ipad 3 or just sticking with my rather newish ipad 2 which ive only had for a couple of months, but need a case, but dont want to buy one in case the ipad 3 upgrade is so compelling i have to get one! and i dont want to waist money on cases either if they wont be compatible, according to iCasestore

    http://www.icasestore.com.au/ipad-cases/
    lorinjones