REPORT: $299 iPad May Rattle Tablet Market

Posted by · January 3, 2012 11:50 am

What better way to begin 2012 than with a fresh rumor from the Apple camp? Considering the success of bargain tablets—most notably, Amazon’s Kindle Fire and the Barnes & Noble Nook Tablet—a DigiTimes report discusses the impact that a cheaper iPad could have in the tablet market.

With its third-generation iPad set to debut this year, the report suggests that the iPad 2 will likely remain on the market at a reduced price. Although it suggests that the new price will be $399—still a bit pricier than the $199 Kindle Fire or the $249 Nook Tablet—the report continues by speculating what might happen if Apple jumped right into the middle of the “non-Apple camp,” whose price range is currently between $199 and $399.

“If Apple drops its iPad price to $299, it could seriously affect the non-Apple camp’s pricing strategy and even Amazon’s Kindle could also be affected,” DigiTimes’ James Wang concluded.

Yet this attractive proposition is contingent on one key rumor coming to pass. What is yet to be confirmed is whether Apple plans to release two versions of the next-generation iPad—a high-end version and a mid-range version. This would leave the lower-priced iPad 2 to fill the entry-level tier, enabling Apple to compete directly with bargain tablets that have taken the market by storm.

Meanwhile, Amazon maintains that it sold “well over” 1 million Kindle units each week of December, allegedly costing Apple 1-2 million iPad sales according to one report. It should be noted that Apple is still set to report record iPad sales for the quarter. How “well over” and how many of those four-million-plus Kindles were actually Kindle Fires, though, is yet to be known. Nevertheless, the press release did confirm that the Kindle Fire was Amazon’s #1 bestseller for 2011.

Should Apple emerge with not one but two new iPads this year and drop the iPad 2 price tag to $299, it is difficult to think that the Kindle Fire will maintain its luster. That is, unless Amazon decides to take an even greater loss per tablet sale than it already is.