Repriced iPad 4 is win for both businesses and accessory makers

By on Mar 21, 2014 in Mobility Strategy | 0 comments

iPad 2 and iPad Air

For two years, ever since the launch of the iPad 3 in March 2012, Apple has offered the $400 iPad 2 as a step down option for cost-sensitive purchasers looking for a full-size 9.7-inch iPad at the lowest possible price.

On Tuesday, the company replaced the iPad 2 with the fourth-generation iPad, a significant “upgrade”, although it is still a generation removed from the current iPad Air.

The biggest change between the iPad 2 and the iPad 4, aside from a significant upgrade in speed, is that the iPad 4 uses Apple’s Lightning connector for I/O and charging, rather than the decade-old 30-pin connector. For the first time, Apple all of the products the company sells across an entire product line uses only one connector — the iPhone 4s and iPod Classic both use the older style connector.

The demise of the iPad 2 is significant. There are many accessories used by retail, educational and corporate companies that either don’t exist or that will have to be upgraded for use with Lightning connector-equipped iPads — and many organizations have extensive collections of 30-pin to USB charging cables.

Apple does offer a Lightning to 30-pin Adapter, but at $29, it is an expensive proposition to include one with every iPad in a multi-thousand-tablet purchase by a large enterprise outfit.

At the same time, however, the lifespan of an iPad 4 will be significantly longer than the iPad 2, which is three years old at this point — an eternity in mobile computing. It has Apple’s A6X processor, while the iPad 2 had the much slower A5 processor. It has 1GB of RAM, double what the older model had, plus a Retina display and much nicer cameras. It also supports LTE cellular connections, while the iPad 2 only supported 3G.

Back in September, before the iPad Air and Retina iPad Mini were released, the iPad 2 accounted for an astounding 22 percent of Apple’s iPad sales, according to Consumer Intelligence Research Partners. Those numbers dropped precipitously after the Retina Mini was released, as it was positioned at the same $400 price point as the iPad 2, but with significantly improved technology. Now, with the iPad 4 available for $400, users are not nearly as penalized on performance when they move from the smaller to larger screen.

Separately, Apple introduced a slightly cheaper 8GB iPhone 5c model, but only in select markets — Germany, France, the United Kingdom, Australia and China — for roughly $70 than the comparable 16GB model. The move is slightly odd, as the company still sells the 8GB iPhone 4s in those markets, but an Apple spokesperson told Re/code that the new model “provides a more affordable option for markets where LTE is becoming more established”. The iPhone 4s is not LTE capable, but has proven popular as the iPhone 5c has been less popular than Apple anticipated.

Apple is not selling the 8GB model in the United States, likely because phone buyers here don’t pay full price for their phones, meaning a $70 discount would not have much impact on consumer behavior.

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