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Analyst predicts Apple to phase out iPad 2 to simplify product line for ‘iPad mini’

Friday, October 19, 2012 · 8:57 am · 16 Comments

“Apple is bucking industry trends and outperforming its peers by creating its own growth through hardware and software innovation — an aggressive strategy that one analyst believes could lead to Apple phasing out the $400 iPad 2,” Neil Hughes reports for AppleInsider.

“Rob Cihra with Evercore Partners said in a note to investors this week that he sees Apple phasing out the current iPad 2, because Apple’s overall vision calls for ‘clearer product tiers,’” Hughes reports. “The prediction comes as Apple is expected to lower the barrier to entry of its iPad lineup by unveiling a new, smaller iPad next Tuesday.”

Hughes reports, “Cihra believes Apple will sell around 7 million so-called “iPad mini” units in the December quarter. Along with the full-size iPad, he sees Apple selling a total of 26 million units in the holiday shopping season.”

Read more in the full article here.

Categories: News

Tags: Apple stock, Evercore Partners, finance, iPad, iPad 2, iPad mini, iPad with Retina display, Rob Cihra

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Comment Feed

16 Comments

iMaki

Friday, October 19, 2012 - 9:23 am · Reply

No way in hell!
Ballmer's left nut

Friday, October 19, 2012 - 9:40 am · Reply

The iPad 2 will remain where it is, at $399, because when the iPad 4 is introduced, the iPad 3 will slot into this price point. This will entice many people who cannot afford the full size iPad to go for the one year prior model at a $100 discount.

The iPad mini will have its own price point which will start at $299 which will address a different market segment – people who value extreme portability but are unwilling to sacrifice too much screen space to achieve it.
- Weekend
  
  Friday, October 19, 2012 - 10:39 am · Reply
  
  Maybe ? Seems to makes sense, but I’ll bet they do phase it out in about a year. They have it all figured out. Remember, Apple knows what we want. We just don’t know it yet. Plus, it is a business. They do have to eliminate duplications and keep margins up as best they can. Whatever they can do to get that stock price back up is okay with me.
  - ApplePi
    
    Friday, October 19, 2012 - 4:21 pm · Reply
    
    I disagree. Apple has historically not been about providing old technology as an entry-level product. It’s only recently that they have kept last year’s model around to get people into the ecosystem.
    
    Apple are all about lowering decision friction in their lines. Look at their main iPad buying page. The iPad2 isn’t even on it. It’s on its own product page. A separate product. For the iPad, you make one decision: white or black. You then choose either Wifi or Wifi + Cellular (stacked on top of each other) and then you choose the capacity (left to right).
    
    Since the human brain naturally more easily compares left and right that’s the decision order they’ve determined you will make. You are essentially making 3 simple decisions, Color, Wireless and capacity.
    
    Instead of 1 decision out of 12 choices, each decision has only 2 or 3 choices. Apple has done their homework on how to reduce purchase friction.
    
    The iPad Air/ iPad Mini will be the new entry-level price point into the tablet world.The iPad2 won’t serve that purpose any longer. What reason would they have for keeping it around?
    
    People who are price conscious will buy the iPad Air, and then choose a color and configuration. There is NO need to confuse people by offering a previous generation iPad2. It just adds purchase friction… hmmm… should i get the old iPad2 with my $400 or get a 32GB iPad Air/Mini?
    
    Another advantage to this is that if they keep this launch timing (iPad in spring / iPad Air in the fall) the iPad Air will automatically be the previous generation technology solution ( from 6 months ago). That way, the cutting edge goes to the iPad and 6 months later, it goes to the iPad Air.
    
    Smart move. Very smart. I’d be surprised if their strategy deviates greatly from this, but it makes more sense than keeping the iPad2 around.
- Rorschach
  
  Friday, October 19, 2012 - 12:06 pm · Reply
  
  You know, and I could be wrong here, but I’m certain I recollect BLN implying that Satan would host the next Winter Olympics before Apple ever released an ‘iPad Mini’…
  - Weekend
    
    Friday, October 19, 2012 - 12:34 pm · Reply
    
    Derek Currie. Derek Currie has been claiming that there will be no iPad mini. For what that’s worth!
    - Indiemuppet
      
      Friday, October 19, 2012 - 1:36 pm · Reply
      
      Burn the witch!!
ob1spyker

Friday, October 19, 2012 - 9:41 am · Reply

Yeah, they’ll retire it … When iPad 4 comes out!
DogGoneToo

Friday, October 19, 2012 - 10:07 am · Reply

1. The previous generations of iPads and iPhones have been a great way to spread adoption of these products.
2. They also act as a way to have plenty of replacement units available when a customer has an issue. I have an iPhone 3GS replaced 3 times in 2 years. It was great that I could go to the Apple store, show them the problem and have them provide me a replacement immediately.
3. Considerable R&D goes into each generation of product. Being able to sell units for an additional year helps improve the return on investment. Manufacturing and component costs would be at their lowest as well thus improve the margin even with a price drop.

The iPad mini will have a different use case scenario to the standard iPad. That means a different customer base (think companies that need devices to hold or scan information for their mobile employees).
- Weekend
  
  Friday, October 19, 2012 - 10:42 am · Reply
  
  Good points all. I wonder how the new connector will factor into phasing out iPads? I’m thinking it might speed up that process.
Bob

Friday, October 19, 2012 - 10:10 am · Reply

I thought they kept the iPad2 for educational folks to buy?
muddygun

Friday, October 19, 2012 - 10:58 am · Reply

Finally something would make since for an iPad mini to be introduced. My thoughts are that iPad 2′s don’t sell that well and if they introduced something at the same price point that gives people another option. They could get good numbers while fulfilling a market.
Just wondering

Friday, October 19, 2012 - 11:04 am · Reply

So for the mini, 16 GB wifi : 249, 279 or 299?
- Currentinterest
  
  Friday, October 19, 2012 - 1:01 pm · Reply
  
  $299 lowest price for 16GB. Perhaps $349 if there is a $249 8 GB version.
  - Just wondering
    
    Friday, October 19, 2012 - 1:50 pm · Reply
    
    249 would be a thermonuclear hit to Amazon and Google. I agree it’s most likely 299.
John

Friday, October 19, 2012 - 2:08 pm · Reply

Totally disagree with this analyst. The iPad mini will provide a different experience. They do not compete directly. Also, selling two generations of iPad provides Apple with many advantages as Horace has pointed out.