There seemed to be some general surprise from many as to why the iPad is going to stay in market. Particularly since it still has the 30-pin connector. Many assumed Apple wants to be aggressive in moving their hardware base to the new Lightening connector and were thrown for a loop with this news.
This actually makes a lot of sense when you understand a few things. First, my friend Stephen Baker at NPD pointed out in a blog post today that the iPad 2 has remained a strong seller for Apple and has outsold the iPad 4 in the US (NPD only tracks US data). Interestingly, they point out that the non-retina Mini may also follow this trend and perhaps outsell the iPad Mini with Retina as well. Either way, we know for sure that Apple sells more Mini’s than full size iPads.
One other way to look at the iPad 2 and why it is still in market is for vertical markets. There are many point-of-service use cases the iPad is used for. The healthcare industry has practically standardized on the iPad. Mobile workers and field agents. Construction markets. Retail. And many more use the iPad and have developed custom software for their mobile workers. In many of these vertical use cases the person using the iPad does not necessarily need the latest and greatest. For these markets the iPad 2 makes a lot of sense.
Now, do I feel the iPad Air will be impacted this way the same way the iPad 4 was impacted by the iPad 2 staying in market? I don’t. I feel the A7 and the software that will come out showcasing its prowess may draw more people to spend up for the “future proofing” that the A7 will allow. This may be especially true in the US. There was a time where it was common knowledge that when buying a PC you should buy as much MHZ or GHZ as you could afford. Now, while I don’t believe consumers will go shopping based on these specs. There will be something psychological to the A7 and the experience it yields that I feel carry over from the old days of PC buying.
I track all these devices so we will keep our insiders informed in real-time as we know.
I can’t see your reasons, but the only thing that I can figure is that this for institutional sales that have contracts to buy this specific model.
From a consumer perspective it really seems like preying on the ill informed.
I’m not sure it will be an issue for the consumer. I do acknowledge they have some real soul searching to do when thinking through the right product for them but I do think the newest lineup will perform well.
I purely view iPad as legacy and vertical at this point.
I actually think that consumers don’t value “cutting edge” features like the retina display as much as us techies think they do. For a normal consumer, even the iPad 2 is a pretty amazing (and revolutionary) product.
And we insiders, just like the Apple honchos, appreciate it
Works great as a lunch tray.
Probably the most important vertical for the iPad is K-12 education and there are a lot of school systems in the middle of iPad 2 deployments. Also, I suspect the price they are actually paying in volume purchases is well below $399 per unit.
Does Apple sell “old” products – like iPad 2 – because they have not yet met contractual obligations for minimum sales?
I think it’s more a question of “is it still selling?” and “are the margins healthy?”
Thinking about this a little, something popped into mind. On the Mac side, “Air” once meant “pricey pro machine”. However, it’s migrated and “Air” now effectively designates Apple’s consumer laptop, (as well, of course, as “super thin”). I wonder if the iPad Air will will follow the same migration path?
Education. Yes, there is a market for a $399 full size iPad, and there are probably verticals that have standardized on the 30 pin connector and aren’t ready to move off. But the main reason is the education market, where Apple has huge, probably multi-year, contracts.
Some really excellent info, I look forward to the continuation.