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[bigtroyjon]

Yeah, Apple is going to cannibalize the crazy high sales of their high profit Ipad by releasing another one at half the price.

If they were to actually do it, Tim Cook might as well hand in his resignation the day it goes on sale.

 

[numble]

Yeah, Apple is going to cannibalize the crazy high sales of their high profit Ipad by releasing another one at half the price.

If they were to actually do it, Tim Cook might as well hand in his resignation the day it goes on sale.

They would rather they cannibalize their own sales than have the sales go elsewhere. Why do they keep selling the iPhone 3GS, iPhone 4, and iPad 2? They've already demonstrated a willingness to sell 2-year old tech at $200-$275 cheaper price. Apple actually had higher margins in the same quarter that they introduced the iPad 2 price drop, compared to the holiday quarter where they sold iPad 2s at $499. The margins can stay up because the tech is old and cheaper to make after 2 years of economies of scale and die shrinks.

iPhone n-2 (3GS) $0, $199 cheaper than current gen [$375 unlocked, $274 cheaper than current gen]
iPhone n-1 (4) $99, $100 cheaper than current gen [$549 unlocked, $100 cheaper than current gen]
iPhone n (4S) $199 [$649 unlocked]

iPad n-2 with smaller screen and smaller battery $???
iPad n-1 10" $399, $100 cheaper than current gen
iPad n 10" $499

 

[bigtroyjon]

They would rather they cannibalize their own sales than have the sales go elsewhere. Why do they keep selling the iPhone 3GS, iPhone 4, and iPad 2? They've already demonstrated a willingness to sell 2-year old tech at $200-$275 cheaper price.

iPhone n-2 (3GS) $0 [$375 unlocked]
iPhone n-1 (4) $99 [$549 unlocked]
iPhone n (4S) $199 [$649 unlocked]

iPad n-2 with smaller screen and smaller battery ???
iPad n-1 10" $399
iPad n 10" $499

Because the old tech isn't the new hot Apple product that everybody wants and it still has crazy ass profit margins despite being old. The profit wouldn't be there in a $200-$250 tablet to make it worth it. Shoot, all indications are that Amazon isn't even really making any kind of meaningful profit on the Kindle Fire at $200. It's all about getting people in the Amazon ecosystem.

 

[numble]

Because the old tech isn't the new hot Apple product that everybody wants and it still has crazy ass profit margins despite being old. The profit wouldn't be there in a $200-$250 tablet to make it worth it. Shoot, all indications are that Amazon isn't even really making any kind of meaningful profit on the Kindle Fire at $200. It's all about getting people in the Amazon ecosystem.

But all indications are that they will be using old tech in this cheaper tablet. They can sell a iPhone 3GS with 2 year old tech for $275 cheaper than the iPhone 4S, why can't they sell an iPad with 2 year old tech, plus smaller screen and smaller battery for $250 off the current gen iPad?

If they followed the way they've been pricing the iPhone, the iPad 2 with a 10" screen and larger battery would be $299 in 2013 anyway.

 

[kame-sennin]

No, a smaller ipad is coming. I have complete faith in that. It's how they expand the life of products. It's just about time for the ipod mini/nano of the ipad line....

The problem I have with this argument is that every iPod fits into a specific context of use. The classic iPod was perfect for storing your entire music library in your pocket. But if you were doing something active like physical exercise, it became cumbersome, so the iPod shuffle was introduced. What context of use would a 7 inch iPad meet that is currently unmet by the iPhone and iPad?

 

[bigtroyjon]

But all indications are that they will be using old tech in this cheaper tablet. They can sell a iPhone 3GS with 2 year old tech for $275 cheaper than the iPhone 4S, why can't they sell an iPad with 2 year old tech, plus smaller screen and smaller battery for $250 off the current gen iPad?

The lower the price, the lower the amount you make with a device with similar profit margins. The 3GS at a 50% profit margin is making them $185. A $200 Ipad with a 50% margin(and the margin wouldn't be that high. Too many fixed costs) would only make $100.

Apple doesn't need to get into the bargain basement, low $/unit business. Especially if it can bleed sales off from the Ipads they are making hundreds off dollars off of.

 

[kehs]

The problem I have with this argument is that every iPod fits into a specific context of use. The classic iPod was perfect for storing your entire music library in your pocket. But if you were doing something active like physical exercise, it became cumbersome, so the iPod shuffle was introduced. What context of use would a 7 inch iPad meet that is currently unmet by the iPhone and iPad?

The iPod market can be covered with a 4 or 3gs with a higher profit margin.

Especially with the proliferation of smart phones.

 

[Radec]

Will buy if true.

Retina display is all I need.

 

[Juice]

I imagine it'll probably start at a $299 price.


$99 Nano
$199 iPod Touch

$299 7" 8GB iPad (iPad 2 specs, 1024x768)
$349 7" 16GB iPad (^"")

$399 10" iPad 2
$499 10" iPad

 

[Vyer]

wtf is an 'imore.com' and what exactly have their sources been 'reliable in the past' about?

 

[numble]

The lower the price, the lower the amount you make with a device with similar profit margins. The 3GS at a 50% profit margin is making them $185. A $200 Ipad with a 50% margin(and the margin wouldn't be that high. Too many fixed costs) would only make $100.

Apple doesn't need to get into the bargain basement, low $/unit business. Especially if it can bleed sales off from the Ipads they are making hundreds off dollars off of.

Apple went from selling $499 iPods to expanding the line and they now sell $49 iPod shuffles.

 

[kehs]

Apple went from selling $499 iPods to expanding the line and they now sell $49 iPod shuffles.

They're called loss leaders.

 

[kame-sennin]

The iPod market can be covered with a 4 or 3gs with a higher profit margin.

Especially with the proliferation of smart phones.

Apple feared that smart phones would dominate the MP3 player market, so they chose to build their own phone and cannibalize themselves. The fact that Apple is using the iPhone to kill the iPod supports my point. See also, macbook air > macbook, iPad > Macs. This has been the doctrine at Apple since Jobs returned. In 1997 Apple had something like 20 different PCs and laptops. Jobs cut the line down to just four products; MacBook, Powerbook, iMac, and PowerMac. Two laptops and two desktops, one of each for professional use and one of each for consumer use.

 

[Vanillalite]

Key here IMO is there is a big fucking different between $200 and $250. $200 isn't going to happen, but $250 puts it more in the realm of possibilities.

Everyone saying no is going with the $200 price point, but as I said on page one I expect something like this to be $250 ($300 could even come to mind). The processor would be the old iPad 2 proc which as already mentioned had a die shrink down to 32nm and is being put into the newer iPad 2s. That coupled with a smaller screen and only 8 gigs + smaller battery could easily put it in the realm of possibility for $250-$300.

PS: The touch isn't really comparable. It's an older product Apple is just keeping in the flow and making cash on. They haven't actually done anything to the product in AGES though.

 

[Nakazato]

if true day one

 

[Jayayess1190]

To people saying the Touch is dead, it isn't. Rumors say the new one this fall will have a dual core, larger screen, and hopefully more ram.

 

[Mineshaft_Gap]

Calling bullshit.

Apple has never, ever priced any of their shit competitively. $250 makes me lol. Apple still charges $250 for their fucking iPod Classic.

 

[Emily Chu]

what happens to the iPod touch line ? 99$ ?

 

[RobotChant]

To people saying the Touch is dead, it isn't. Rumors say the new one this fall will have a dual core, larger screen, and hopefully more ram.

What if the rumored 7" Ipad is really a new 7" Ipod Touch? mindblown.gif

 

[JonnyBrad]

They would be canabilizing their own market/profit margin.

This rumour is just a digitimes one recycled.

 

[coldfoot]

Extrapolated from: http://www.isuppli.com/Teardowns/News/pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx

NAND Flash 8GB: $8.40
DRAM: $7.60
Display (70%): $39.90
Touchscreen (70%): $28.00
Camera(s): $4.10
WLAN/BT/FM: $15.35
Power Management $5.85
Battery (70%) $15.89
Mechanical/Other (70%): $33.46
Box contents: $5.50
Manufacturing cost $8.15

Total: $164

I'd say with 32nm + the new tech Apple will be using in the iPhone 5 that combines the touchscreen digitizer to the lcd display to make it thinner, it's certainly possible to get the cost under $150, which means $300 retail price.

 

[PhoncipleBone]

They would be canabilizing their own market/profit margin.

This rumour is just a digitimes one recycled.

Better than Amazon or someone else taking their profits. They would rather cannibalize themselves than see someone else get that money.

 

[Oozer3993]

Will it come with complimentary sandpaper?

 

[Dreams-Visions]

Better than Amazon or someone else taking their profits. They would rather cannibalize themselves than see someone else get that money.

Correct. And besides, people who want a 7" tablet aren't the same people who want a 10" tablet. That 3" is a huge difference. They will co-exist just fine.

 

[kehs]

Better than Amazon or someone else taking their profits. They would rather cannibalize themselves than see someone else get that money.

Their not really cannibalizing themselves. it's them playing the long game instead of the short game.

I don't see anything from apple that even remotely resembles a long term plan.

(iCloud is a really really sub par implementation.)

 

[shira]

Pretty sure the iPod has 3rd stage cancer at this point.

Wow classy

 

[Vinterbird]

Would be interesting for the tablet market if it came true. Oddly enough I heard earlier this week from a advertisement agency I work with every now and then that Apple is planning a iPad priced Macbook, that is barebones and geared towards a cloud based experience for the end-user.

I doubt it's totally true, but there seems to be a bunch of talk in general of Apple attacking competition on the price point.

 

[dem]

I hope so.

The iPad is way too big. The playbook was the perfect size.

 

[noah111]

Calling bullshit as well, if not only for the supposed resolution.. tbh, we've been hearing about this shit (RUMOR!!) periodically ever since iPad was first announced. Is there truth to it? At one level or another, sure.

Maybe next year, 'iPad Mini'. :lol

 

[kehs]

Wow classy

Is that offensive on any level?

Smartphones are up in the usage level, independent media devies are down.

People are chossing devices based on their connectivity. As in, they'd rather pick a 3g device over a wifi device.

 

[Al-ibn Kermit]

Is that offensive on any level?

Smartphones are up in the usage level, independent media devies are down.

People are chossing devices based on their connectivity. As in, they'd rather pick a 3g device over a wifi device.

Did you know that Steve Jobs had cancer?

 

[Agent_J]

these are the same types of rumors as the iphone nano. never has and never will exist. there is no need for a product in between the ipod/iphone and the ipad. hell, the ipad is the bridge between computer and phone, why would we need a bridge between a bridge?

 

[Al-ibn Kermit]

these are the same types of rumors as the iphone nano. never has and never will exist. there is no need for a product in between the ipod/iphone and the ipad. hell, the ipad is the bridge between computer and phone, why would we need a bridge between a bridge?

It's not about size so much as price. A tablet that basically does all the things you would use an iPad for, but costs half as much, would presumably eat into Apple's sales. The idea is that you make an iPad in the same price/size range as the Kindle and Nook tablets to compete.

Eventually you either run out the competition by price-matching a product with a more popular brand name, or you eek out a tiny profit from this new niche rather than let somebody else take it.

But the thing is that the Nook and the Kindle are designed to just get you to use Amazon and B&N to buy other things. The actual hardware doesn't make much profit, it's the gateway to further purchases that makes it worth it to those companies. Apple is just the opposite, they make very little profit off of the app store but make high profits on their hardware.

So the only logical reason to do this is if they want to simply get rid of all the competitors and then eventually just one day raise the prices? I don't know.

 

[darkwing]

lol Apple will never do this, iPad sells like hotcakes

 

[mrklaw]

Just put the iPad 2 guts in a smaller screen. Screen is a major part of price and that scales more than linearly, so a 7" screen will be cheaper than 7/10 the 10" cost. Plus smaller battery. iPad 2 recently got a die shrink improving battery life and making it cheaper to produce in volume, perfect for a smaller iPad.

$200 is probably wishful thinking, maybe they'll start at $250 but they don't need to compete directly on price with the fire. Plus that might be some gimped 8GB (hope not)

I imagine it'll probably start at a $299 price.


$99 Nano
$199 iPod Touch

$299 7" 8GB iPad (iPad 2 specs, 1024x768)
$349 7" 16GB iPad (^"")

$399 10" iPad 2
$499 10" iPad

Not enough space between the 16GB 7" and previous 10"

More like

$249 - iPad 7" 8GB
$299 - iPad 7" 16GB

$399 - iPad 2 16GB

$499 - new iPad 16GB

 

[NinjaBoiX]

Do not want.

I plan on getting an iPad, but 7" does nothing for me. At that size, I might as well use my phone.

This. I have a Galaxy Note, so this screen size seems a little pointless for me. Will wait for the new iPad, or grab a iPad2 cheap. The 3 just seems like a compromise, sharper display, slower performance. I think I'd rather save some money and go for the 2 at this point.

 

[Zyzyxxz]

Shit..... I've been waiting for a 7" tablet, I was planning on getting an Android one to complement my iPad 3 but I don't know if I want to replace my 10" one or buy the 7" which doesn't make sense...grrr!

 

[numble]

It's not about size so much as price. A tablet that basically does all the things you would use an iPad for, but costs half as much, would presumably eat into Apple's sales. The idea is that you make an iPad in the same price/size range as the Kindle and Nook tablets to compete.

Eventually you either run out the competition by price-matching a product with a more popular brand name, or you eek out a tiny profit from this new niche rather than let somebody else take it.

But the thing is that the Nook and the Kindle are designed to just get you to use Amazon and B&N to buy other things. The actual hardware doesn't make much profit, it's the gateway to further purchases that makes it worth it to those companies. Apple is just the opposite, they make very little profit off of the app store but make high profits on their hardware.

So the only logical reason to do this is if they want to simply get rid of all the competitors and then eventually just one day raise the prices? I don't know.

Apple makes more money off of their ecosystem sales than Amazon or Barnes and Noble, it just pales in comparison to their hardware profits.

Amazon and Barnes and Noble try to put current-gen hardware and not 2-year old tech in the hardware. They also don't have the benefit of the scale (Apple designs it's own chips and even flash memory now) leading to lower margins.

The $99 AppleTV is a profitable device and is basically the iPad 2 without the display.

 

[mescalineeyes]

This simply isn't true.

There is no reason for Apple do make a 7" iPad as consumers are not looking for that size at all.
So basically, they'd be giving up a huge chunk of their profit by selling a lower priced device with a lower margin as well as combating an opponent that is simply not there.

 

[Xater]

I would buy this!

 

[subrock]

Won't happen.

Ding ding ding

 

[mrklaw]

This simply isn't true.

There is no reason for Apple do make a 7" iPad as consumers are not looking for that size at all.
So basically, they'd be giving up a huge chunk of their profit by selling a lower priced device with a lower margin as well as combating an opponent that is simply not there.

you should email Apple to let them know this important scientific research.

If you don't want one, doesn't mean others don't. Why are there so many 7" android tablets? Surely there must have been some research showing people would want that size as a combination of performance and portability?

I wouldn't want one either - I use my ipad mainly at home, and I like the larger size for PDFs etc. But I can see the attraction of a 7" one (and mainly the attraction of price to get you into an ecosystem)

 

[XMonkey]

I'm gonna say a 7" (or slightly bigger actually) 1024x768 iPad, with 16GB storage, 1GB RAM for $299. Unsure about what SoC they would use. The iPad 3 one seems a bit overkill, but who knows.

 

[hEist]

i'm sold if true.

 

[amrihua]

Where will this leave the iPod touch?

 

[mrklaw]

I'm gonna say a 7" (or slightly bigger actually) 1024x768 iPad, with 16GB storage, 1GB RAM for $299. Unsure about what SoC they would use. The iPad 3 one seems a bit overkill, but who knows.

ipad 2 SoC. They just did a die shrink which the latest ipad 2s are getting, which brings costs down and increases battery life (needed with a small tablet as space means small battery)

ipad 3 SoC is only needed to drive the big screen

 

[Cheebo]

There is no possibility that Apple (or anyone) would ever be able to beat Amazon in the pricing wars. In fact it'd be bad for Apple because then they'd get sucked into Amazon's commoditizing machine. They aren't there to make a profit on hardware and that's Apple's bread and butter.

Considering the success of Fire they will get stronger in the market and be able to exert even more pressure on manufacturers. I'm personally expecting a bloodbath between the two as their markets start colliding and pricing is not something Apple will continue to be able to shake off and still maintain the profits they have.

Where in the world are you getting this idea that the Kindle Fire is having any impact at all? Kindle Fire sales have been pretty weak while iPad sales have been gigantic.

Is that offensive on any level?

Smartphones are up in the usage level, independent media devies are down.

People are chossing devices based on their connectivity. As in, they'd rather pick a 3g device over a wifi device.

iPad usage is way up and is growing faster than the iPhone market. Yet the wi-fi model outsells the LTE model. Which completely goes against the point you are trying to make.

 

[XMonkey]

ipad 2 SoC. They just did a die shrink which the latest ipad 2s are getting, which brings costs down and increases battery life (needed with a small tablet as space means small battery)

ipad 3 SoC is only needed to drive the big screen

Ah yes, forgot about the slight iPad 2 SoC refresh. Makes sense then.

 

[mescalineeyes]

you should email Apple to let them know this important scientific research.

If you don't want one, doesn't mean others don't. Why are there so many 7" android tablets? Surely there must have been some research showing people would want that size as a combination of performance and portability?

I wouldn't want one either - I use my ipad mainly at home, and I like the larger size for PDFs etc. But I can see the attraction of a 7" one (and mainly the attraction of price to get you into an ecosystem)

Then why is no one buying those 7" tablets? Save for the Fire they're all duds.

 

[mrklaw]

info about the ipad 2 die shrink - http://www.anandtech.com/show/5789/the-ipad-24-review-32nm-a5-tested

The original 45nm A5's die measured approximately 122mm^2. The new 32nm A5 has a surface area of only 69mm^2. That's actually amazingly good scaling at 57% of the old die size, as perfect scaling from 45nm to 32nm would be around 50.5%.

Assuming Apple could make full use of a 300mm wafer (which it can't, wafers are round, chips are rectangular at best so there are some unusable chips), Samsung could deliver 579 45nm A5 die to Apple. The move to 32nm would give Apple 75% more die per wafer at 1015 chips.

These ARM based SoCs are already fairly cheap - all selling well below $30 (many around $15)

We measured a 15% increase in our web browsing battery life, a nearly 30% increase in gaming battery life and an 18% increase in video playback battery life.