Apple is expected to announce its fiscal 2012 Q3 earnings in about 4 weeks and we’ll learn just how successful the New iPad really was. Apparently, it’s the iPad 2 that’s actually the major cash cow still at Apple, priced at $399. As you know, when Apple debuted the new iPad in March, it dropped the price of the iPad 2 to $399 in the 16GB WiFi version.

Now there’s also a special version of the iPad 2 with a new generation of Apple A5 processor, with a better architecture and better optimized for power consumption. That and the price are reasons enough for people to buy the last year iPad, rather than the iPad 3. And that’s that they did, so the iPad 2 cannibalized the iPad 3’s profits. It’s interesting that when you put the iPad 3 and iPad 2 side by side, there are many customers who prefer the older version.

That’s why Apple only kept the 16GB WiFi model of the iPad 2 and not the whole product line, in order to appeal more to customers. Right now, for every iPad 2 buyer that choose that over the iPad 3, Apple loses $100 in profit and if the number is too big, Apple may just give up on the iPad 2 for good. Last quarter Apple sold about 2.1 million $399 iPad 2 units, meaning 18% of the total iPads sold, so not a big increase from the previous quarter. This was the first full quarter with the iPad 2 and iPad 3 sold side by side.

So, anxious to see those quarterly reports?

  • DeianStancu

    Of course. iPad2 offers more at lower price. Battery lasts more, performance is better (moves less pixels than iPad3), does not heat.
    Sometimes I think to ditch my “new iPad” for an “older” one……..

  • I don’t think that Apple is loosing 100$ – instead they earn from people that will never buy iPad for 499$ but do it for 399$. That’s a market expansion.