Apple’s forthcoming iPad pricing to dramatically disrupt tablet market, sources say

“Sources from Apple’s supply chain have claimed that there will be two versions of the new iPad, one targeting the high-end segment and the other the mid-range,” James Wang reports for DigiTimes.

“Digitimes Research believe the two new iPad models will both be equipped the A6 processor with high-end model coming with a high resolution panel (2048×1536) and the mid-tier model featuring the same grade of panel as iPad 2 (1024×768),” Wang reports. “Apple’s pricing strategy for its iPad series is crucial to the tablet market. It remains to be seen at what price level Apple will set its entry-level iPad. For Wi-Fi only models, US$299, US$349 or US$399 may all be possible.”

Wang reports, “If Apple drops its iPad price to US$299, it could seriously affect the non-Apple camp’s pricing strategy and even Amazon’s Kindle could also be affected.”

Read more in the full article here.

MacDailyNews Take: If so, Apple would immediately sever the supply lines of the oxygen-tank-toting Android iPad wannabes. Without price to pitch, the iPad wannabes have nothing.

[Thanks to MacDailyNews Readers “Dan K.” and “Sarah” for the heads up.]


    1. Seems like this is just one more dirivative story from last week’s Digitimes suspect reportage. I’ve seen 4 or 5 “reports” from as many authors all based on the same unsubstantiated rumor from Digitimes. Do we have to get served up this regurgitated drivel every time it is puked up?

  1. It would make sense to offer 2 models with the usual range of options (3G, storage capacity). I have to wonder if they will up the storage capacity past the 64 GB maximum we see today. 128 GB might be useful for some hard core non-computer toting individuals for a truly self contained system on the go.

  2. If Steve were still running apple, I bet there would be no more than 1 Ipad and the price tag would stay the same. Older ipad versions would drop in price. It works for both iPhone and iPad, why change strategies? How many times have we heard rumors of iPhone nanos and the like?

    1. Hard to say. The iPad has two very different use cases. People like me want a moderately priced lightweight device for reading books, watching videos and browsing the web. Other people I know are replacing their computers with iPads (mostly executives and academics).

  3. Yes, two models – 3G and hifi.
    …BUT, they could keep the iPad2 since the costs have been amorticised, to pull the rug from under Amazon with a lower price. Or keep it specifically for the education market and replicate the Emac line with the added advantage of not cannibalising the business and consumer pricing range.
    It’s a big ‘but’ though

  4. I think Apple will introduce on February 24th the iPad3. It will have a Quad-core A6 processor, 1gb memory, full HD IGZO (retina) display, improved battery and Siri. It will be the same size and weight as the iPad2. The price points will be the same as the iPad2:

    iPad3 $499 16gb WiFi only
    iPad3 $599 32gb WiFi only
    iPad3 $699 64gb WiFi only
    iPad3 $629 16gb Universal 3G/WiFi
    iPad3 $729 32gb Universal 3G/WiFi
    iPad3 $829 64gb Universal 3G/WiFi

    iPad2 will continue “as is” but with less storage and new price points:
    iPad2 $249 8gb WiFi only
    iPad2 $299 16gb WiFi only
    iPad2 $349 8gb 3G/Wifi (separate GSM/CMDA models)
    iPad2 $399 16gb 3G/WiFi (separate GSM/CMDA models)

    If Apple does this they will raise a formidable price/performance bar for all competing tablets.

    1. I think $50 ($449MSRP) under the current pricing is possible, but $249? that is just silly (considering the parts alone cost $270 and that is before you build, distribute, advertise and pay your people a salary)

      1. I don’t think Apple pays $270 for the iPad2 parts and assembly since they get the best prices of anyone in the industry. Also, prices of the older components will decline over time. Keeping the product static (except for the small cost savings on the 8gb SSD) will help create some profit. They might sacrifice profit to capture the entry level of the entire tablet market however. They are doing this with the iPhone 3gs and iPhone 4 pricing so I still see $249 as a good possibility.

        1. thethirdshoe, yeah that is what the iPad used to cost, 8 months ago when they did a tear down. And those are high quantity pricing not per item pricing (which would be several times more)
          Dave Thornton, you have gone from being silly to being stupid, those figures are from several firms specializing in teardown/component pricing (and were remarkably similar) and were done less than a year ago (I don’t think the market has changed that dramatically in a matter of a few months)
          So, apparently you are forming this opinion on absolutely no facts what so ever. Dam dude, you should get a job as an analyst you would be a shoe in

    2. That would be awesome. One unintended disadvantage would be pissing off all of us who just spent $500 on an iPad 2 for Christmas though. If they really can offer it for $300 and still make money, then many of us will feel like we just got gouged by Apple.

      1. Welcome to technology Rick, todays tech is replaced tomorrow, usually cheaper. Can’t handle the game, don’t play it.

        I paid $800 for my OG iPhone, do I wish it was $199, sure. Did it push me away from Apple? NOPE..

      2. Rick, that estimate for $270 is just for the parts alone (you still have to design build pack ship distribute and sell it). Apple couldn’t have possibly sold it for much less than the $500 you paid.
        Witness (as conformation) that no other manufacturer can even come close to the ipad2 at a $500 price.

          1. That parts pricing list was compiled by several (all close in the estimate) firms that specialize in electronics teardown component price estimates. This was done a few months after the iPad was shipped so they would have been up to date as of a few months ago, not three years ago (and where did you get three years????)

    3. that’s about right, in principle. Look what they’ve done with the iPhone: they didn’t create a new “cheap” version; instead, they just sold the older models for less money. No reason to think they won’t do the same with the iPad.

      I’m not 100% sure, however, that they’ll be able to do the iPad3 with the Retina Display for $499. Wouldn’t surprise me if prices stay the same as the iPad2, but the screen is another upgrade option, like 3G and hard drive space.

      1. Seeing as $250 is less than the cost of just the parts inside it I don’t think that is reasonable. Kind of like saying I’ll buy an Aston Martin if they would sell it to me for $30K. While it might be true, it is just silly because they can’t possibly produce them for anywhere close to that price.

        Old German saying:
        —If you want nice clean fresh oats expect to pay a fair price. On the other hand if you will accept them after they have been through the horse, the price will be considerably less…

        In other words, I think you can get one of those (crap) android tablets for $250, knock yourself out.

    4. Deja vu on the post, Dave.

      You may be right, but your price points for the iPad 2 are overly aggressive. Your RAM reduction idea has merit (although Apple has economy of scale pricing on that commodity), but I don’t see Apple going to $249 for an iPad 2 even with reduced RAM. If Apple’s gross margin on an iPad 2 is 40%, that would represent $300 cost out of $499 price for the base model.

      Sacrificing margin and, possibly, reducing the RAM might enable a price as low as $349 for a base model iPad 2, but I don’t see it going any lower than that, even for just 8GB.

      If the iPad 3 provides a significant upgrade in functionality and performance, as expected, then an iPad 2 would probably need to be about $150 less than an iPad 3 to attract a lot of buyers. But I am no expert – those are just guesses on my part.

      1. The market segment that Apple needs to go after is the Kindle Fire/Nook Color customer. The only way to get to them requires at least a $299 price point. It is certainly easier to get there by discounting an existing product (with less SSD storage) than to design a new one. This is what they have done with the iPhone – offering the 3gs for free and the 4 for $99 (albeit with subsidy from their carriers). The retail prices of the iPhones and iPads are not very far apart so Apple should be able to sell the iPad2 for $299 (or possibly $249) to get new customers that they otherwise would not.

  5. iPad and iPad Pro. Professionals (MD’s, scientists, field engineers, pilots ect.) would gladly pay double (the current price) for a ultra high res. version (with faster GPU and CPU) and Apple’s passion for ultra efficient manufacturing (and virtually unbeatable pricing) might generate a $450 or even $400 entry level model (but $299? Not likely, considering the quality of apple devices and their unwillingness to compromise that just to have a low price leader)

  6. None of us really know what the price will be for the next iPad but I’m pretty sure it’s going to be amazing. I’m thinking higher res screen, faster processor and SIRI doing something extraordinary. And who knows what else. It is Apple after all.

  7. What if:

    iPad 2 specs with plastic back, 4 or 8 gigs ram with iCloud storage tethered to device? At $299 Apple’s margin/gouging would be perserved. However, would such a device cut significantly in iPad 3 sales? That’s the one drawback to pricing so low, which is why Apple has avoided it for so long. The iPad killed the netbook market, remember. Could iPadC(heap) kill the iPad!?!?

    1. Apple avoids the bottom because they are unwilling to build crap that half works, not because they fear moving one product model over another. (remember two things; Apple is very agile and able to shift production to where it needs to be (model wise), and Apple almost always sells more of the high end models than they do the low end)
      Add to that; that the professional users are crying for MORE not less iPad (ie. some high number (like 70% or 80%) of professional users polled said they would be willing to pay over $1000 for a premium version of the iPad

  8. If Apple sold one iPad with a 7.8 thousand pixel screen, another iPad with 3.1 million pixel screen, and they both had the exact same A6 processor with the same built-in graphics processor, the cheaper iPad would probably run twice as fast as the retina model.

    I don’t believe Apple would sell a cheap and expensive versions of a product where the cheap models are faster than the expensive models. That creates way too much confusion for the consumer trying to select which version they want.

      1. I’m predicting the same thing.
        – iPad2, still selling and rocking hard as the low price option
        – iPad3, with the new A6 chip and retina display, comfortably 2 years or more ahead of the competition’s tech.

    1. You are not taking into account the reality of semiconductor production. When a wafer is produced chips of varying capabilities are produced (because of natural variables in the production process) the chips are then tested and graded as to capability (IOW a 2.2GHz rated I3 CPU and the 3.3GHz can come off the same production line, even off the same wafer)
      Apple could easily take the “premium” chips from it’s A6 production line and clock them higher than the standard model (and use a higher density (and more expensive) battery to power it.) This would result in a high resolution model with the same (or even greater) performance as the low resolution model.

  9. Every added configuration variable complicates the entire retail chain exponentially, multiple memory, case, screen and connectivity possibilities, not to mention the app ecology if you have multiple screen resolutions . Eventually you make it probable that any given customer, walking into any given retailer, will not find the configuration of iPad they seek. So, will they settle for what they find or leave that retailer and go elsewhere? Very amateur move to create chaos out of world beating order. Not gonna happen.

  10. How can Apple “disrupt” a market that’s so pathetic it barely exists? Multiple commentators have said the same thing: There is no “tablet market”. There’s only an iPad market.


    1. The non iPad tablet market may not exist in any meaningful form, but you can disrupt the companies entering that market.

      Any company launching a tablet will have had to spend an immense amount of money developing the product and ancillary services. Apple have shown how it should be done, so there is no point in a rival doing things by half measure – however, doing it right costs a lot of money.

      So having committed themselves to spending maybe a billion dollars in the hope of getting a slice of the lucrative tablet market ( which they haven’t noticed is only lucrative only for Apple ), Apple comes along and offers a proper tablet at a low price and instantly kills the prospects for any product that is not sold for substantially less.

      There is no way that a rival can hope to make money by selling a decent tablet for less than Apple, so they will either have to take a loss on every tablet they sell, or abandon the project and write off the investment. Either way, the company is disrupted and just to make matters worse, convention Wintel PCs and laptops sales have stagnated, so there is little prospect of making up for that loss elsewhere.

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