Apple Might Be Replacing iPad 2 with $399 iPad 4

| Analysis

Apple is about to replace the US$399 iPad 2 with a $399 iPad 4, a move that would dramatically increase the value of Apple's entry-level iPad price point. Citing unspecified sources, 9to5Mac reported that iPad 4 units have been delivered to Apple Store locations with instructions not to open them until Tuesday, March 18th.

iPad 4 with Lightning Connector

iPad 4 with Lightning Connector

The move coincides with a report out of Europe that Apple will unveil an 8GB iPhone 5c on Tuesday, possibly to replace the iPhone 4s as the company's entry-level iPhone. If both stories are accurate, Apple would be eliminating the legacy 30-pin Dock connector, uniting its shipping iPhone and iPad product lines under the Lightning connector for the first time.

I like this iPad 4 story for a number of reasons. First and foremost is the 30-Pin Dock/Lightning issue that goes along with Apple discontinuing the iPhone 4s. Having both connectors in shipping products has always been questionable, and it runs contrary to Apple's focus on product simplicity. Getting rid of the legacy port is good for the entire iOS ecosystem and customers alike.

For another, if Apple can make a profit by selling the iPad 4 at $399, the company would be bringing Retina Display quality to the entry level for those who want a full-sized iPad. That's a big deal, especially for the education market—Retina Display iPads offer a substantially better experience than iPads with lower resolutions.

The iPad Air is an amazing device, but for the budget conscious, a $399 iPad 4 is a far superior choice than an iPad 2 at the same price. It's not even a contest. Faster processor, better graphics, better display—it could open up sales at the lower end of Apple's tablet business.

The only question is one of margins. Can Apple sell the iPad 4 at a profit for $399? Probably, though obviously not at the same margins achieved with the iPad 2. If so, however, this would be a great move that should increase sales.

Mark Gurman has images of the boxed deliveries at 9to5Mac.

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