Official iPad Mini And iPad 4 Price Cuts Coming From Apple
Apple (NASDAQ: AAPL) is reportedly planning to reduce the MSRP of its fourth-generation iPad and first-generation iPad Mini.
According to DigiTimes, seven-inch tablets that are priced above $299 (in other words, all of the current iPad Mini units) will be reduced. The same goes for 10-inch tablets priced above $399.
If true, Apple would likely discontinue the second-generation iPad, which is still available on Apple.com for $399.
Electronics retailer Micro Center has already reduced the price of the iPad Mini. While it initially offered a discount of $50, the device is currently $30 cheaper than the MSRP of $329. The fourth-generation iPad has also been discounted.
Related: iPad Mini 2 Rumor Roundup
Apple has yet to sell any of its Retina Display tablets for less than $499. The company was expected to drop the price of the third-generation iPad -- the first to feature a Retina Display -- as soon as the fourth-generation model was released. But the iPad 4 was released just eight months after the third-generation model. In breaking the typical 12-month upgrade cycle, Apple decided to discontinue the iPad 3 and continue selling the iPad 2 at a discounted rate.
Now that the Retina Display iPads are more than a year old, Apple may be willing to reduce the price.
How Low Will Apple Go?
If the fourth-generation iPad is reduced to $399, how cheap will the first-generation iPad Mini become?
Apple could thwart the competition with a $100 price cut, which would make its seven-inch tablet as cheap as the second-generation Nexus 7 and the Kindle Fire HDX. Both of those tablets have high-resolution displays and processing power that are superior to the iPad Mini. But that may not matter to consumers who want an Apple product and its iTunes ecosystem.
While this price cut may be ideal to consumers who are looking for a deal, it may not be realistic. Apple currently sells its most basic iPod Touch for $229 -- why would the company undercut its value by charging the same price for the first-generation iPad Mini?
This, however, was a dilemma the company faced last fall. Apple decided to charge $329 for the 16GB iPad Mini -- just $30 more than the 32GB iPod Touch. At the time, the 32GB iPod Touch was fairly new and featured a four-inch screen, mirroring the iPhone 5. Assuming that there was a market for both, Apple released the Mini anyway -- and applied a premium price at launch.
Instead of a $100 price cut, Apple may drop the iPad Mini to $279 and call it a day. This would allow the company to maintain its premium status without charging so much for the device that consumers automatically choose the newest model.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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