Rumor: Apple to release budget iPad starting at $299

Hit or miss rumor site Digitimes has reported that Apple may plan on introducing a low-end iPad 2 with a starting price of around $299 after the next-generation iPad hits the market.

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. 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 (2048x1536) and the mid-tier model featuring the same grade of panel as iPad 2 (1024x768).

Digitimes can be as accurate as your average coin toss, but with the Kindle Fire and other, lower-end tablets now on the market, Apple could consider doing what they've done with the iPhone for years -- keeping the previous year's model around at a reduced price to choke the air out of the budget players. iPhones come with steep carrier subsidies, however, and there's no telling if Apple could -- or would be willing to -- make even a previous year's iPad at a low enough cost to both match the budget tablet market and still keep Apple's margins where they need to be.

A reduced price iPad 2-style device does make more sense than the 7-inch iPad Digitimes has also been peddling lately.

Source: Digitimes

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Andrew Wray

Andrew Wray is a Salt Lake City, Utah based writer who focuses on news, how-tos, and jailbreak. Andrew also enjoys running, spending time with his daughter, and jamming out on his guitar. He works in a management position for Unisys Technical Services, a subsidiary of Unisys Corporation.

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Reader comments

Rumor: Apple to release budget iPad starting at $299

19 Comments

I don't think there will be 2 models, Ipad is Ipad and iphone is Iphone, i don'tthink apple provide second models from them at lease they are different in the sizes

Hate to break it to ya bud but apple came out with a less expensive iPhone 4 after the 4s launch and that was also rumored

Loss leader: The iPad apps atre more expensive than iPhone apps in general. Apple will make a fortune in app sales. Plus they would build on their near-monopoly. They don't need to make big margins on a low-cost iPad. Breaking even makes $$ through the App Store and advances the strategic plan.
And while I will be drooling over the high end version, having an extra iPad to control devices and store recipes and for homework etc makes perfect sense to me.

Apple runs the app store at just above cost. They're in the razor business, not razor-blade. They couldn't sell the iPad at a loss and keep it on the market without substantial, perhaps impossible changes to their business model.

I'll have to agree with Rene on this one, Apple's business model is competely different from Amazon's, for instance. Apple makes money on hardware and keeps apps as cheap as possible. They have to sell iPads at a premium to keep their profits, or bring the prices of the harware down and make apps much more expensive. Both strategies work, but Apple is committed to the former.

This is stupid. Think about this before you publish. It makes sense that the iPad 2 will drop to $299 but not two models. I feel like tipb has just been posting anything and everything they can. We want real news, not: unsubstantiated rumors.

I find it a little hypocritical of TIPB to call another site "hit or miss". All of these "insider"-type sites are part of a rumor mill, sometimes you get the facts right, other times you don't, all the sites put a "whoops, guess we were mistaken" clause in their articles. If you are going to report rumors, just do it. But don't point fingers and name-call other sites, it's just poor reporting.

Aaron,
We get a ton of rumors sent to us, we publish almost none. When we do publish them, like the iPhone 4S release date last year, we're very careful to phrase them appropriately and give our readers context.
When we link to rumors published by others which we do far more often, we do the same thing -- we give them context. Digitimes is hit or miss. Do the match; that's a fact. Readers deserve to know that. We weigh their rumors less than we weigh, for example, Kane from the The Wall Street Journal, Dalrymple from The Loop, or others who have a far, far more accurate track record.
Not all rumors are equal, and poor reporting would be to report them as such.

Kudos for labeling rumors as such. But out of curiosity, could you name anything Digitimes gets right? Hit or miss implies they get something right. Of course, if I issued 3 or 4 rumors per month, i'd probably hit a few on the head as well.
Anyway, they're among the worse. Already this year we've got retina screen or bust expectations with the ipad 3. Why? Apple doesn't have a history of providing great upgrade leaps each year. We do expect faster, thinner, and lighter. I'm just not ready to board the retina screen train yet.
But what really concerns me is that beyond retina, what could apple really do each year to make that ipad a must buy? Beyond the usual processor & internals bumps that is? A redesign? There's only so much you can do there. For that reason, going retina is pretty much Apple's lone nuclear option for boosting ipad sales. When do they press that button? IMO, soon. Samsung is on it and Microsoft & windows 8 tablets are poising to strike later. Amazon has already played the part of apple in introducing a device that does 80% thing (of what an ipad does).
As for the cheap ipads, time will dictate this. We're already seeing budget ipads at 399. Another year will push the older ones down even further. Apple will always demand its profit margin no matter what rumor is floated about.

I do believe there will be two models. one with retina display and one without. Aug, the A6 sounds so attractive, since I use mine for music. With a quad processor, I think there could be a form of Logic released, or maybe a usable notation app.
augh! the upgrade game. I went from iPad to iPad 2, but 2012 seems to be unclear for how much disposable income I will have. its look lean :/

Something tells me that this $300 iPad will be exactly that... a $300 iPad.... the original iPad. Note how the 3GS is still selling like gangbusters because it's now FREE with contract. The original iPad works well, accepts some updates, and does all that stuff that the Kindle and other low cost tablets can do. The Kindle fire is okay for reading books and magazines, watching media, and playing a few small games. So is the iPad 1. So any announcement will simply say the original iPad is simply going to be cheaper.

An 8GB iPad would have so little storage that it would be nearly useless, but I wouldn't be shocked it it happened, since that is their low end phone & media player. If you want more storage space, you need to spend the coin on the iPad 3. It would sell extremely well.
A 16GB iPad 2 at that price, however, would decimate the Kindle Fire. For only $100 more you get a more mature ecosystem and twice the storage space.
There is no other tablet on the market right now that matters.