In recent quarters, Apple CEO Tim Cook has preached a now-familiar refrain. Yes, iPad sales are down, but there is a replacement cycle to be had. In addition, the iPad is important to businesses and consumers.
The problem is the tablet market is struggling. IDC's data tells the tale. The fact that Amazon's heavily discounted tablets and Huawei are growing tell you just about all you need to know.
So Apple most-popular version of the iPad gets an update and a price cut. Apple marketing chief Phil Schiller isn't shy about dropping upgrade cycle hints. "New customers and anyone looking to upgrade will love this new iPad for use at home, in school, and for work," he said in a statement.
The upshot here is that the iPad is a conduit to sell more services for Apple, which needs to keep its installed base. As for the updates to the iPad, Apple's improvements are relatively modest. The win here is the new starting price. The iPad mini gets more capacity for the $399 starting price.