A low-cost iPad 2 would decimate the tablet market

A low-cost iPad 2 makes all the sense in the world and Apple would be foolish not to do it.

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On last night's PowerPage Podcast Rob Parker and I discussed the potential impact of a low-cost iPad and how it would decimate the floundering tablet market.

The topic came up based on a rumor that Apple will keep the 16GB Wi-Fi iPad 2 in the product lineup when it announces the iPad 3 next week -- presumably at a lower price. I opined that a low-cost iPad would be the ultimate strategy for Apple and probably be a death blow to the raft of poorly-selling Android tablets in the channel.

Imagine what a $399 (or even $349) iPad 2 would do to the rest of the market.

It would simply obliterate it. It would make the decision between a $200 Kindle Fire and a cheap iPad 2 much, much harder. It would also make the decision to go with an iPad much easier for parents and grandparents who are uneasy about spending $500+ on what's perceived to be a "premium" priced or luxury product.

Heck, it would practically be disposable!

But where it hit home for me was in education. Parents and educators are (understandably) concerned about giving 10-14 year olds a $500 slab of aluminum and glass. You can probably imagine what would happen to an iPad after getting tossed around in a careless student's backpack for even one day.

While a price drop won't do anything to help the iPad's inherent fragility, a $350 or $400 tablet is much easier to justify for a student than one that crosses the psychological $500 price barrier -- without any accessories. Not to mention that $100-150 can but a lot of sleeves, cases and apps.

When you factor in powerful educational tools like iBooks 2,  iBooks Author and iTunes U a low-cost iPad seems like a no-brainer. Apple could sell low-end iPad 2's at cost (or even a small loss) and inflict even more pain on the rest of the tablet market.

DigiTimes posted a rumor (via MacRumors) that Apple will release an 8GB iPad 2 (down from the current low-end, 16GB model) alongside the new high-resolution iPad 3 at its press event on March 7.

Boom! There's your $349 iPad.

Unfortunately, the low-cost iPad 2 will probably be priced at $399 because Apple has a knack of charging about $50 too much on these things. But, regardless of price, a lower-cost iPad 2 makes all the sense in the world and Apple would be foolish not to do it.

What's the sweet spot for you to buy an iPad? What about for your parents? Or for your kids?

Photo: MacRumors