Why Apple Is Keeping the iPad 2 [UPDATED]

by Steve Wildstrom   |   October 24th, 2012

iPad 2Some commentators have expressed surprise that Apple is keeping the iPad 2 in its lineup after announcing what it calls the fourth-generation iPad on Oct. 25. The company’s normal practice would be to keep the n-1 product while dropping anything older. Instead, Apple dropped the third-generation iPad announced just last spring.

But when you look at the products, this call is not at all surprising. The key is that it’s a big stretch to call the new iPad (the 9.7” version) a fourth-generation product. All that is new for the iPad announced this spring is a processor bump from the A6 to the A6X and the replacement of the 30-pin dock connector with the new Lightning connector used on the iPhone 5 and the iPad mini. If Apple hadn’t already had an event scheduled, this announcement probably would have been made by press release.

Then there’s the question of pricing. There’s probably very little difference in the bill of materials between the new-new and the old-new iPad. So dropping the price of the third-generation iPad to $399 to maintain a $100 differential between the products would have forced Apple to take a significant margin hit. So the iPad 2 stays and the third-gen version is retired.

The real fourth-generation product is the mini. Although it uses a non-retina display and an older processor, it is amazingly thin and light. Its stunning new case, made with a new manufacturing process, echoes the design language of the iPhone 5.

I expect that come next March or April, Apple will hold its by-now traditional iPad announcement. Then we will really see a new-generation product. Look for a thinner, lighter tablet with the perfect chamfered bezel edge that is Apple’s latest design hallmark.

UPDATE

The announcement of the new iPad has set off a remarkable and totally unjustified chorus of whining, such as this piece by Cnet’s Roger Cheng, “thanking” Apple for rendering his months-old third-generation iPad obsolete. It’s no more obsolete today than it was on Monday. It’s true that the new iPad features a faster processor, but I haven;t heard anyone complaining about the current model being slow.

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Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.
  • Defendor

    That isn’t why it’s retention is surprising.

    IMO the iPad 2 carryover was a stopgap until a less expensive iPad was in the lineup.

    Now that the Mini exists, who is going to buy the iPad 2? Heck if the price were same, I would buy a mini before an iPad 2, but at $70 cheaper, I can’t see many choosing the older heavier iPad 2.

    IMO the iPad 2 will be quietly retired once stocks clear. If that wasn’t the plan it will be forced when Apple sees the sales drop off.

  • rd

    ipad 2 is leased for 3 year by Education.
    So Apple has to maintain ample supply
    for at least that amount of time.
    if those institution switch to mini then ipad 2 will disappear.

    March/April is too ambitious. Rogue Series 6 may not
    be ready by then. so it not just matter of getting a new
    screen and battery

    • http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

      A spring re-design is not that ambitious when you think about it. For the spring, all Apple has to do is redesign the iPad Retina with the design language of the iPad mini, making it thinner and lighter and keep all internal components the same as the iPad 4th Generation. Then in the fall, they just rev it up with a spec bump using a newer, faster processor and other improved components.

  • GagaScrewer

    I’m not interested in the Mini, nor by the 2nd gen. Where do I go from here?

    • steve_wildstrom

      A you interested in an iPad at all. If not, it doesn’t matter. If so, the “fourth-generation” model just slips into the product line as a replacement for the Spring 2012 iPad, The only different you’ll really notice is the replacement of the 30-pin by a Lightning connector. That’s much less disruptive on the iPad than the iPhone, since the tablets generally don’t make much use of dock accessories.

  • thorntondw

    Very sound reasoning. I appreciate Techpinions more than any other site because your articles are insightful and well reasoned as opposed to the noise from so many “idiots” out there.

    • Armando

      +1

      • http://www.facebook.com/people/Rockatansky-Roadguarrior/100002002636129 Rockatansky Roadguarrior

        +1

  • mhikl

    You got it, Steve. However, there is another minor reason and that is it would have peeved off those who have purchased the iPad v3 original.
    Aside: I have to test the little fellow out first, but I think my cracked and soaked iPt will now not be replaced by another iPt.

  • alexkhan2000

    Agreed. I still love my iPad 2 and it serves me well. I didn’t see the need to upgrade to the third generation despite the Retina Display and don’t see the need now with what I’d call 3.5 generation. The next one will be one that I’m really interested in. It’ll need to be lighter. I don’t really see the point of getting it much thinner although that wouldn’t be a bad thing.

    My overall plan is to upgrade the iPhone and iPad every two years. Once a year is really for the hardcore fans and people with extra money to spend. To me, it’s just not practical. But every two years, the difference is very noticeable and well worth the upgrade. I’d reckon that most Apple users have similar thoughts about the upgrade cycle.

    • Tracey Cross

      Totally agree with you. Is till have the ipad 2 and love it.

  • http://twitter.com/johnwenn John Wenn

    The processor jump from the iPad 3 to the iPad 4 is going from the A5X to A6X. The A6 was introduced last month with the new iPhone.

  • FalKirk

    “The announcement of the new iPad has set off a remarkable and totally unjustified chorus of whining…” – Steve Wildstrom

    I could easily write an article on just this, but I’m trying to change my ways and not respond to silly arguments like that. They deserve to be ignored.

    I prefer to address my remarks to the smartest people on the net – (the readers of tech.pinions).

  • jfutral

    I agree that the new iPad is hardly a next gen model. What I am curious about is the timing. I don’t think it bad or wrong, just curious. What I am curious about is how much of the new model eliminates Samsung parts over the previous model?

    As for the mini pricing, I wonder how much the pricing is also about supply management. Google and Amazon had to sell for zero margin or razor thin margins (if not a loss) because, quite frankly, they had to. It was simple supply and demand pricing. Apple, no doubt, also prices with potential supply constraints in mind. Kind of like WiFi at a lot of major airports. Not yet free everywhere because can you imagine how slow the connection would be if everyone could get on who wanted to?

    Joe

  • http://twitter.com/paulcharris Paul C. Harris

    All good points, but sorry, you’ve missed the real reason:

    http://paulcharris.wordpress.com/2012/10/29/why-apple-really-kept-the-ipad2/

    • steve_wildstrom

      That’s an additional reason, but I doubt it’s the primary one. Apple wanted to keep a cheaper 9.7″ iPad in the lineup and they couldn’t do it with the third-generation because it would have been too much of a margin hit and would have seriously cannibalized new iPad sales–there just isn’t enough difference between the two models to justify a $100 price differential.

  • http://www.facebook.com/will.solve Will Solve

    the 2 is for a different customer set- Businesses and Schools; Business uses like kiosks registers, displaying information, loaners, public and probably on a stand. Schools for the right price-point, maintenance standardization and charging port compatibility.