Comments on: Is the iPad 2 cannibalizing the new iPad’s profits?

By: iphones sold in 2011

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By: Kreig Zimmerman

Kreig Zimmerman — Mon, 09 Jul 2012 23:33:53 +0000

yep. i debated the #kindlefire for months before i chose a post-intro refurb #ipad2 for $349.

but underlying that reasoning was a) the piss-poor profile of the fire and 2) the seeming inability of the new ipad to do more than be more graphically svelte.

By: Mike Hathaway

Mike Hathaway — Sun, 08 Jul 2012 18:35:32 +0000

iPad 2 is my goto ipad for the schools. We order them 30 at a time. There is almost no benefit to the ipad 3 in the Education world. The only real difference in the units is the screen. And you get 20% more ipads for the buck, the 2 is a screaming deal.

Personally I think the $399 price point is now a permanent fixture apple would not kill just to up profits. It gets people in the door and makes it real hard for anyone else building a tablet to attempt a price war (at least unsubsidized. Apple has that 85% repurchase rate from customers down the road making the need for a profit on any initial product purchase not as important.

By: 106alleyways

106alleyways — Mon, 02 Jul 2012 15:15:11 +0000

I did think of buying the ipad 2 as well because it was just so much cheaper now but I’ve decided to opt for the new ipad.

By: Neil Anderson

Neil Anderson — Sun, 01 Jul 2012 20:50:18 +0000

Our district just bought iPad 2s.

By: Stewart Tan

Stewart Tan — Sun, 01 Jul 2012 08:22:42 +0000

if people really compare the specs betwen the new ipad and the ipad 2, i would say the specs difference is only about 10% of the upgrade made on the ipad 2. the new ipad has a brighter screen, upgraded camera and faster network speed (4G). so, will this actually change the thoughts of customers on the apple tablet? First of all the 5 megapixel camera on the new ipad brings less interest in customers thought as people rarely use a tablet for snapping photos so the camera upgrade isnt a much big deal on why customers should head on for the new one instead. secondly, a brighter screen on the new ipad isnt changing the minds of people about their ipad 2. the ipad 2 already posseses a great screen resolution which perfect for reading. but this time apple seemed to think the other way round. the only good thing about the retina graphics in the new ipad is just by zooming into pictures and photos we can see the detail which is clear. this is what apple thinks but in my opinion people dont really care about zooming in to see great detail. another thing will be the 4g network. the new ipad comes with ultrafast 4g network where as the ipad 2 is 3g. you know internet speed is also affected by weather conditions so sometimes 4g is not neccessarily ultrafast if compared to 3g. when ipad 2 connects to 4g network it is also seemingly fast. like i said the difference between the new ipad and the ipad 2 is just a minor upgrade on speed and performance. this is how customers think when buying a product whether its a year old resulting the ipad 2 still sells greatly in market. so if apple is planning on cutting down the sales of the ipad 2, it would bring great dissapointment to apple users as well as fans just to pursuade customers to buy the new ipad.

By: Nam Seunghan

Nam Seunghan — Sun, 01 Jul 2012 06:34:46 +0000

You are only talking about variable cost here. All the fixed costs are allocated to the unit, in any manufacturer. What sandman argues is that if R&D cost for iPad2 and any other fixed cost doesn’t incur any more and fully allocated, then iPad2 could be more profitable than new iPad, which may be still be allocated into new iPad, per unit basis and unit cost of goods manufactured.

Your argument should be, since we are talking about earnings (and more directly, product margin), this cost is all incurred, and doesn’t make difference in calculation. Your reply is confusing.

But, Sandman could be still right, if Apple has to incur more fixed cost (R&D or other) for new iPad. It’s not that far fetched, since new iPad will get more features in coming iOS6.

Now coming to your post, I don’t think Apple is naive not to notice your point. After all, they are the one who has all the information and control over inventory. You calculated all based on $399 for ipad2 and $499 for new iPad. But they could easily control the flow of inventory and make ipad2 available at mostly 32gb, so that either way, they are maximizing.

Also, all of this is, I should say with no offense, with no hard evidence. You could have surveyed, say, just around manhattan, so that you can minimize the cost in your side, to find out what’s really happening. Are the customers getting ipad2 or new ipad? Is ipad2 in short leash?

By: MikeP

MikeP — Sun, 01 Jul 2012 04:26:14 +0000

First of all, as an owner of a Gen 1 iPad and a New iPad, I can tell you there is a huge difference in the display quality, especially for tasks like reading and writing. As for hardly an upgrade, better screen, better graphics processor, better camera (yes it does come in handy sometimeus), better Bluetooth and more RAM makes it a very good upgrade, especially when coming from a Gen 1 iPad, or no iPad at all. That said, if you don’t want the extra features, iPad 2 is still a great device and an excellent buy.

By: eldernorm

eldernorm — Sun, 01 Jul 2012 03:41:45 +0000

Rags, while I generally agree with you, you keep talking like Apple is a Target store… Is Market share a big winner for you or does profit make a difference.
The key here is that people are buying Apple. Apple buyers stay with Apple. They do not jump to Kindle just to save $ 100. And yes, Apple may not make an extra 300 million $ in a quarter, they will have to live with 5.1 BILLION…
Just saying… the bigger picture is where Apple is at. Many of us see that, even if we cannot clearly describe it.

Just a thought. en

By: anipaduser

anipaduser — Sun, 01 Jul 2012 02:37:42 +0000

take some pictures and videos and play some games and you will see the difference, lol