The $399 iPad 2 doesn’t make sense

iPads

During the event earlier this week, Apple announced that the iPad Air will take over the top-of-the-line spot, starting at U$499, while the iPad 2 will keep on being sold for the same U$399 as before. The original iPad mini will also keep on being sold for a reduced price of U$299, while the Retina iPad mini will start at the same U$399 as the iPad 2.

The iPad 2 price doesn’t make that much sense to me. I completely understand the decision to keep on selling this model, as It appeals to those who want an iPad but don’t care about having the latest iPad. And the data disclosed today by Consumer Intelligence Research Partners is a proof of that, as it shows that the iPad 2 was responsible for 22% of the total US iPad sales in the last quarter.

iPads CIRP

Trusting data like this is rather risky, however, as they’re always based on estimates and… educated guesses. But assuming for argument’s sake that this data is accurate, the current price policy for the new iPad line seems unapologetically confusing.

You have the iPad 2 carrying a 2-year-old hardware (no Retina, A5 processor) being sold for the same price as the new iPad mini (with Retina and the A7), and for just U$100 less than the iPad Air (Retina, A7). Meanwhile, the first iPad mini (which has the same specs as the iPad 2) had its price cut from U$329 to U$299. Even if you leave aside the fact that in 2 years the production cost for this hardware (especially the A5 silicon) has been invariably reduced, the fact that the mini had a U$30 price cut and the iPad 2 didn’t is rather confusing.

If in the last quarter the iPad 2 was responsible for 22% of the total iPad sales in the US, the iPad mini represented a total of 32% of the pie.  With the first mini costing less but not the iPad 2, I’m not sure what Apple expects to happen here. Reducing the iPad 2 price to something around U$349 would have seemed like a reasonable thing to do, although even so it would still seem a little costy, considering the options provided by the rest of the line.

As one sweaty soon-to-be-retired-CEO once said, “let’s just see what happens”. I am honestly hoping to see how my assessment of the situation is wrong 3 months from now. But I’m looking very hard and I can’t see it now.

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