Why Is Apple Keeping the iPad 2 Around?

Among Apple's (NASDAQ: AAPL  ) big announcements yesterday, the company said it will keep the iPad 2 in production at the same $399 price point that it's occupied for a year and a half. That model was originally released in 2011, and its components look a little outdated in late 2013. Yet there must be a reason Apple is keeping the device around.

Localytics estimates that the iPad 2 remains the most popular model, suggesting that demand for the iPad 2 remains healthy. It would seem that a notable portion of the market is perfectly happy with a lower-resolution display and slower processor, so Apple wants to keep the device around to satisfy demand. The iPad 2's continued existence goes to show how strong Apple's pricing power is. The company can sell a tablet released in 2011 for a significant premium to newer rivals with beefier specs. On the smartphone front, Apple still sells the iPhone 4 as well for $350 in markets such as China.

In this segment of Tech Teardown, Erin Kennedy discusses Apple's new iPads with Evan Niu, CFA.

The future of Apple
Apple has a history of cranking out revolutionary products -- and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 24, 2013, at 12:04 AM, chizucheese wrote:

    Why is it apple is keeping the ipad 2 around? The answer could be very simple for the product that apple introduce this time.

    Mac OS X has been offered free across all the Mac so that they can standardize the application offered to the consumer.

    iPhone, iPad Air and iPad mini with retina display share the same technology, using the A7 chip and M7 processor. Why big jump for iPad mini from A5 to A7 (skipping A5X, A6, A6X)?

    They have higher end iPad, they need device for the lower end iPad. Since they have released iPad mini with retina display, they need to keep iPad mini for the lower market. The same for their bigger brother, Apple need to select one device for their lower end for 9.7 inches tablet.

    What similarity iPad 2 and iPad mini has? Both shared the same technology, A5 processor.

    With all this, it make sense that they want to simplify the manufacturing process. If they choose any other processor to be manufactured, thus will add additional line, different skillset, different technology manufacturing to produce different type of iPad (be it iPad 3, the New iPad...)

    The reason is a simple as that.

  • Report this Comment On October 24, 2013, at 12:47 AM, SanPasqual wrote:

    Tech specs alone do not a good seller make. The iPad2 is a bit heavy, but still a great browsing tablet. The latest offerings are tempting, but I don't see the need to jump until the refunds start to roll on the selves.

  • Report this Comment On October 24, 2013, at 5:19 AM, fauxscot wrote:

    Uh.... because it's .... profitable and the incremental cost of keeping it in the product line up is zero and the cannibalization issues are manageable and the product still extremely useful? Or...... because the wise operators and marketeers in the most successful company on the planet think it's a good idea and don't consult before they make their apparently quite good decisions, one after the other?

    Is that why?

    Do I win the internet? Why, I think I do!!!

  • Report this Comment On October 24, 2013, at 6:08 AM, kedevore wrote:

    I feel that the reason that Apple is still keeping the iPad 2 and iPhone 4 around is because of the amount of 30-pin cables they have for them out in the marketplaces. So, instead of retailers throwing them away, they can still sell them and make some money.

  • Report this Comment On October 24, 2013, at 7:35 AM, jdmeck wrote:

    I have an iPod 2. It does not need a faster processor or better resolution.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2696271, ~/Articles/ArticleHandler.aspx, 9/24/2016 8:49:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 23 hours ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
AAPL $112.71 Down -1.91 -1.67%
Apple CAPS Rating: ****