Why Apple Want To Sell Us The iPad 2 for $399

[nanoERA]

When I saw that slide in Apple event which showed the price of the iPad 2 I was like "WTF is Apple doing?"

Then I said, wait a minute, maybe they are referring to "The new iPad" which was released in Q2 2012 or the "4th gen iPad" which was released in Q4 2012. But when I start reading the stories in The Verge and other tech site, I realized that Apple really want to sell us a "Two and a Half" years old device which run A5 processor without Siri and without Retina display for $399 which is just $100 less than the device they just announced !

I read some commentators trying to justify this move from Apple as they are trying to attract the education institutes and encourage them to use the iPad in their education system.

But this totally invalid, simply because the iPad 2 barely can run the iOS 7, and when iOS 8 got released this device will be dead and unsupported !

And if we take it financially, you can hit the market and find "The new iPad" which 2X faster and with Retina display for exactly the same price (I bought one for my son 3 weeks back)

For me, this prove that Apple really sucks when it comes to targeting the cheap devices market.

[phaus]

Apple seems to be continuing a trend of cutting costs and passing the benefits on to themselves.

First, instead of reducing the price on the iPhone 5, we get a plastic 1st-part knock off. I was ridiculed for saying that the high price of this device leaves no reason to choose it over a marginally more expensive 5S, but it now appears that quite a few people are going for the 5S for that very reason.

Second, in spite of the fact that many people complained about RAM utilization on rMBPs, they cut the baseline memory in half, for the sole purpose of deluding people into thinking that they actually reduced the price of the 13" model. 4GB of ram in a computer that already costs nearly double the average price that people pay for a laptop is absolutely ridiculous. I'm happy that its now possible to upgrade to 16GB, but the baseline seriously should have had at least 8GB, at the same price.

Finally, we have the iPad 2, a device that should be priced at about $150-$200 that instead costs $400.

My theory on Apple's mobile devices is that the company was worried that the latest models didn't differentiate themselves enough to compete against the last generation.

As for the rMBP, I really don't have an answer for that, it just seems mind-bogglingly stupid.

I love my iPad, and I was anxiously waiting to see what the new rMBPs had in store for us, but I'm honestly dissapointed with Apple's recent releases. Its like Tim Cook is purposely trying to fulfill the prophecy laid out by all the post-Jobs Apple Naysayers.

[cmatthias]

Similarly to the reduction in RAM on the 13" rMBP, they also removed the discrete video card from the baseline 15" model.

[dangrossman]

Reducing RAM also lets you pad battery life numbers. It can mean as much as 2-3 watts per GB of RAM.

[rprospero]

My hypothesis is that it's about encouraging upgrades rather than increasing the cheap market.

I've heard from multiple sources that Apple computer and devices have a much higher resale value than other electronics. I've never understood this from a Moore's law perspective, but I've been shown compelling evidence that it's true.

Now, imagine that you own an iPad 2 and want to upgrade to the latest iPad. You'd start by saying that the iPad is $700 and then subtract off the amount you'd get for your iPad 2 on eBay. Natively, I'd say that the device is two and a half years old, so you'd drop the original price by a little under a factor of four, so I'd sell it for $200. Thus I need $500 to buy the latest iPad.

Of course, I've now seen that the iPad 2 is a $600 device, new. Droping off a factor of two, because it's used, I put it up on eBay for $300. I now only need $400 to get the latest iPad. Apple just saved me $100 without actually cutting a penny from their own sales.

Of course, they could have made more money buy selling the iPad 2 directly to the person I sold it to on eBay, but that jsut creates a larger iPad 2 install base that the need to deal with. They get more money in the short run, but they then have to deal with fragmentation in the long run. Instead, they've now made the used market more expensive, discouraging used buyers while encouraging upgrades.

[ScottWhigham]

For me, this prove that Apple really sucks when it comes to targeting the cheap devices market.

I can't wrap my head around their thinking this entire year. Apple doesn't want "cheap devices" - that much is clear.

* The "cheaper" iPhone comes in at $600 instead of the $700 real iPhone (in the US at least)

* The iPad 5 is 8x faster than the iPad 2 (according to the press conf footage) but is only $100 more

* The Mac Pro has doubled or quadrupled in price over previous iterations (and maybe even higher). $3000 for the base model but that doesn't include internal storage (256GB is not enough for video/audio/pro use), 4K monitor, keyboard, mouse, external media drive, firewire converters, etc. The true cost of the Mac Pro is going to be $4000 - $5000 once you add in taxes and external components.