Apple dropped the iPad 2 as its lower priced tablet on Tuesday and replaced it with the formerly discontinued fourth generation iPad with Retina Display. Wells Fargo analyst Maynard Um thinks that was a smart move because it puts Apple in a better competitive position against Samsung and its new Galaxy TabPRO product line.
Bringing back the fourth gen iPad was a smart move for Apple
The fourth generation iPad is available with 16GB RAM, Apple's A6X processor, faster graphics, a 5 megapixel front-facing FaceTime HD camera, a rear-facing camera that can capture 1080p video, and a Lightning connector instead of the older 30-pin Dock Connector. The WiFi-only model costs US$399, and the WiFi plus LTE model is priced at $529.
Mr. Um said, "The price reduction comes at a time where Samsung is launching a new Galaxy TabPRO line priced at $499 (Model 10.1/16GB/Wi-Fi) and positions Apple to be more competitive in regards to pricing."
Apple's pricing for the fourth gen iPad comes in under Samsung's new tablets. While the iPad may be an older model, its features and price point, coupled with the brand recognition and cool factor Apple has, could be enough to draw in new customers that would otherwise consider Samsung's Galaxy TabPRO line.
Mr. Um is maintaining his "Market Weight" rating and target range of $385 to $576 for Apple's stock. Apple is currently trading at $535.95, up 4.55 (0.86%).