Rumor claims Apple set release lower priced 8GB iPad 2, no 64GB iPad 3... wait, what?
Yet more rumors are surfacing that Apple will release a lower priced 8GB iPad 2 alongside the iPad 3 this month... but this one also claims there won't be a 64GB iPad 3. Digitimes, which has not been extremely accurate lately, says this is to "defend" against Windows 8 tablets coming later this year.
Lack of a 64GB iPad 3 model sounds very, very strange, given both the original iPad and iPad 2 offer 64GB models. So does the idea of competing with Windows 8 tablets, which have a completely different cost structure to Apple's. Namely, Microsoft makes money licensing Windows. ODMs (Original Device Manufacturers) like Samsung, HP, Dell, etc. make money on the hardware. In the past they've shown a willingness to operate on razor thin margins, driving prices to the bottom, hoping to make it up on volume. That didn't work out for netbooks and it's tough to see it working out for tablets. In either case, that's not a game Apple plays.
Last year, Apple chose not to keep the original iPad around at a reduced capacity and lower price point, however they have done this with older generation iPhones and iPod touches in the past, most recently with the low-end 8GB iPhone 4 when the iPhone 4S was released.
If Apple ends up doing the same with the iPad 2 this year, it could be simply to lower the cost of entry to attract more customers to the iPad platform.
Digitimes previously speculated that Apple would try to hit a $299 price point with a budget iPad, but given Apple's traditional focus on profit margins, that will depend a lot on how low they can drive production costs. Further, since the iPad isn't a subsidized product, Apple can't shift the discounts to carriers the way they do with the iPhone.
Given the lack of subsidies, Apple's profit margins, and the rumored 8GB storage capacity, it's hard to see how appealing even a slightly discounted iPad 2 would be. iCloud and iTunes Match would slightly reduce local storage demands, but not significantly.
Would you find an 8GB iPad 2 appealing at $399?
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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.