Why did Apple debut an ‘ultimate’ iPad with 128GB storage?

“Apple Inc. debuted an iPad with twice the memory of older models, offering users more space to store movies, videos and books amid mounting competition in the tablet market,” Lisa Rapaport and Scott Moritz report for Bloomberg.

“The new iPad with 128 gigabytes of storage will be available starting Feb. 5 priced at $799 for a Wi-Fi version and $929 for a device that also offers a cellular connection, Cupertino, California-based Apple said today in a statement,” Rapaport and Moritz report. “The latest iPad model comes as as Apple works to fend off challengers from Google Inc. and Samsung Electronics Co. in the market for tablets, which NPD DisplaySearch has estimated will more than double to $162 billion by 2017.”

Rapaport and Moritz report, “‘The tablet market is expanding, and Apple sees a market opportunity, not just at the low end but also in the high end with heavy media consumers,’ Tavis McCourt, an analyst at Raymond James & Associates, said in an interview… ‘This is Apple logic,’ he said. ‘When cheap netbooks were popular and taking over, Apple upgraded, rebranded, and raised the price of their MacBooks.’ Apple could apply this same high-end strategy to the iPhone with future models of the handset, McCourt said.”

Read more in the full article here.

Related article:
Apple announces iPad with Retina display featuring 128GB storage capacity, on sale February 5th – January 29, 2013

54 Comments

  1. Why the 128GB iPad now? Preparation for rumored 13-megapixel camera in next iPhone (which will double image storage needs) and the 128GB storage option coming with the Microsoft Surface Pro. Also, imaging professionals have been clamoring for this upgrade for a very long time. Now, Apple needs to drop the 16GB models — their capacity no nonger is adequate.

        1. In conjunction with streaming/on-demand internet content in general and iCloud in particular? Yes of course this can serve an adequate “offline cache” or “sliding window into their data”, which makes your 64k quip somewhat less… bitey.

    1. Or they got some favorable component pricing from a partner for a 128 gig SSD and want to add another high-margin option for people who want it and can afford it.

      BTW, Apple has been a corporation since the 1970s.

    2. It’s tempting to view every corporate machination negatively, but that’s usually a sign of uninformed life experiences. In this case, ask yourself how Apple can decrease the cost of MacBooks with SSDs when the volume is pretty low and steady? The answer lies in “supply chain” contracts that are a hallmark of Tim Cook. If Apple contracts for double the amount of flash RAM in iPads, the other Apple products that use the same memory benefit as well.

      Additionally, Apple probably sees something coming where that capacity is going to be really important, or just as likely, they can see that 16GB isn’t going to be enough and so it’s time to start the expansion.

      Regardless of the exact “why” do trust the corporation that has been doing so well for the past decade and a half to continue to make smart decisions, rather than deciding on limited information that this is just greed.

    3. If you’re right @sdfg, I’m not pleased. Apple has zero reason to play games with the TechTards and manipulators on Wall Street. This entire game of fscking over Apple is specifically because Apple is head-over-heals more brilliant than ANY other company on the planet. Lowering themselves to the stupidity level of average Wall Street is as self-destructive as they are. I don’t like that. I don’t like that at all. 🙁

      1. I’m afraid that’s exactly what Tim Cook is doing. He’s playing musical chairs with Wallstreet. Look, all these people above trying to provide a rationale for why Apple is launching a 128 GB iPad because of a great deal on component pricing. Please. Apple’s been the biggest consumer of flash memory for years. Any deals at this point is probably on the order of pennies or maybe a few bucks.

        No, this is about offering something to keep their revenues going. They spec bumped the iPad 3 to the iPad 4 and now they’re spec bumping the iPad, YET AGAIN! There’s no need for this.

        Imagine Jobs in charge. iPad event in March. Media going crazy. What will Apple reveal? It’s a brand new design! A new processor! A new design! Thinner and lighter! The world goes crazy again, and their revenues explode.

        Sorry, but stop making excuses. Apple is reducing itself to spec bumps full stop and they need to wake up. I’ve been saying this all along: Tim Cook is wrong for Apple.

        1. If this is the case, then we can only watch how it goes. Cook is doing what he believes is ‘the right thing to do’ as opposed to emulating Jobs. I’ve been critical of Cook’s dependence upon China and their criminal culture for years.

          This is where things will get more complicated than most people are willing to understand. We have idiots and parasites on Wall Street screwing over Apple. AND we presumably have a weaker willed Apple responding to this stupid stuff. That’s TWO problems, not one. But watch it get compressed by the dumdums into one problem or other anyway.

          Apple: You beat everyone else by being Apple. Stay Apple. You are NOT Wall Street’s lowlife and mediocrity. Stay that way. You know exactly how. The only change you should be worried about is actually IMPROVING yourselves, NOT changing into yet another Wall Street self-destructive dumdum parasite company.

          1. Guys! People have been asking for 128 GB iPads since the first one came out. More music, more movies, more photos ,more Apps, what’s not to love?

            It may be as simple as filling a demand.

          2. No need to worry DC, Apple’s DNA is safe in TC.

            Jobs knew exactly in who’s capable hands he was leaving the company. A master numbers man, production and supply chain specialist of the required skills who can take Apple’s new found monumental standing, into a new dimension…

            This will involve new managment tricks atrategies and executions un similar to the past qnd of global significance. Apple is now a gentle giant without any matching competative or innovative equal. Apple is now writing the next chapter – Apple king of the next decades.

            Give Jobs the credit that he knew what he was doing? Of course!

            Cook was his choice and Cook’s long proof of performance record to rely on when he wrote the succession.

            1. I’ll sleep better tonight. 😉 Cook is his own man and he’s already done great work. Goodness knows Jobs had to deal with plenty of screw jobs from inside and outside the company and had to learn how to deal with them

          3. No need to worry DC, Apple’s DNA is safe in TC.

            Jobs knew exactly in who’s capable hands he was leaving the company. A master numbers man, production and supply chain specialist of the required skills who can take Apple’s new found monumental standing, into a new dimension…

            This will involve new management tricks strategies and executions un similar to the past and ones of global significance. Apple is now a gentle GIANT without any matching competitive or innovative equal. Apple is now writing the next chapter – Apple is king of the next decades.

            Give Jobs the credit that he knew what he was doing? Of course!

            Cook was his choice and Cook’s long proof of performance record is what he relied on when he wrote the succession plan.

            1. Look, nobody knows how this is going to turn out, including me. But, I have my intuition based on experience and past and current indicators. And every ounce of it is telling me that Tim Cook is not the guy to lead Apple.

              Does that mean he sucks? No, I think he’s doing a decent job in certain areas. But he’s also making some big, big mistakes. Overall, these mistakes, in aggregate, are currently transforming Apple into less of a product company… and more into a “company”. That means, that they appear to be worrying more about the stock than the products with things like spec bumps. Sorry, still not buying that there’s a huge market out there for a $799 tablet. Show me the data…

              In spite of what Cook rattles off in interviews, the writing is on the wall. Since Jobs has left, key execs have gone too. Customer satisfaction ratings are down in retail. And Apple is now spec bumping their most popular product! They’ve done it twice in 4 months. And no Retina display in the Mini?

              This stuff is insane. What’s happening is exactly what Jobs alluded to in his Bio: “Cook isn’t a product guy.” The problem is, Apple needs a product guy, and bad.

              Some of us have been here done it all before, and we’ve seen what happens. Jobs chose Sculley to run Apple, and where did that get him?

              I think, sadly, one of the only individuals to run Apple… is Steve. Because Apple is simply the persona of Steve Jobs.

              We’ve seen this over and over when founders leave. Sculley’s a good example and so is Vidal Sassoon. Apple needs to focus 100% on products and screw Wallstreet and the media. With Tim Cook in charge, I don’t see this happening.

            2. “Some of us have been here done it all before”…
              ” But, I have my intuition based on experience and past and current indicators. “..,
              “That means, that they appear to be worrying more about the stock than the products with things like spec bumps.”…
              “Customer satisfaction ratings are down in retail.”

              SAYS WHO???? YOu?????

              This ain’t about you or your short acquaintance and flirt with what you think you know d.

        2. sdfg, you need to become your own devil’s advocate and stop filtering out information others supply that proves counter to what you *want* to see reinforcing the conclusion you’ve drawn.
          “Apple is reducing itself to spec bumps full stop”
          Intel Core 2 Duo MacBook Pro introduced 10/24/2006
          bumped 6/5/2007
          bumped 11/1/207
          bumped 2/26/2008
          bumped 10/14/2008
          bumped 3/2009
          bumped 6/8/2009

          Heck, the product now known as “iPod Classic” has been bumped 26 times.

          You so casually disregard the evidence that suggests memory deals are what is leading Apple to release a 128GB iPad. Yet I can tell from having worked in product marketing at Apple that this is exactly… exactly! what happens with components like memory and hard drives. And in the business dynamics at play right now (divesting of the all-mighty Samsung supplier and buying/loaning fab equipment to manufacturers) history and *knowledge* trumps your suppositions.

          1. They have taken one of their flagship products that has a clear ~1 year cycle and have now spec bumped it twice before the year is up. Jobs’s model was release once a year for this product. When you release another version, it’s major and eye catching and everyone runs to buy it. The line ups, the buzz… that is LOST with the way they’re spec bumping the product now.

            When they start adding a faster processor into the iPhone after 6 months and then a memory upgrade at 10 months in… with zero design changes… let’s see what you’re saying then.

            These are examples of why Apple is becoming less of a product focused company and one more focused on corporate issues… on their stock and goosing sales from quarter to quarter.

            Your MacBook examples don’t hold because they have clear product cycles too… in terms of design… Apple’s been sticking with the same design on their laptops for about ~3 years a pop… before making any major changes. The product cycles for their laptops used to be 1 year pretty much on the dot for many years. The iBook Clamshell ushered in a bit of a longer cycle and then the iBook white Dual USB solidified their ~3 year design cycle for laptops. For the PowerBook, the Pismo was the last of the ~1 year product cycle design changes for their pro laptops until the Titanium came in.

            First stage is denial my friend…

  2. “The latest iPad model comes as as Apple works to fend off challengers from Google Inc. and Samsung Electronics Co. in the market for tablets”.

    Really? Apple could re-release the original iPad and still not have to worry about the tablet offerings from these two. When it comes to tablets, only the iPad is relevant.

    1. Well, for the informed and quality minded, only the iPad is relevant.

      We know full well there are millions of frowny faced, suffering victims of AndRhoid garden paving stones out there. They wanted cheap and they got cheap. Think of Windows versus Mac. Same old Shih Tzu. Same old human follies.

      1. I’m all for the larger iPad. I was referring to this hack writing that Apple is doing this to “fend off” competitors. In the tablet space, there currently isn’t any competition. Like MDN so often says “what tablet market? There is only an iPad market”.

        Sales and usage number prove that. I don’t think Apple should become complacent, but they definitely don’t currently have to “fend off” anyone.

  3. They’d be smart to do the Mini at 16/32/64 and then bump up the regular iPad to 32/64/128. It’d create a reasonable segment between the two products. Apple’s has typically had ridiculous markups on their options so they could easily absorb the higher entry level of the 10″ iPad.

    1. There is evidence of that. Microsoft, rolling out its Office cross-platform subscription model, believes it has solved its cash and market position problems by returning to what it knows best—selling licenses.

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