Apple Forced to Release iPad 4 Because of "Stale" Sales
Did the third generation iPad flop at retail?
In the months that followed, Apple (NASDAQ:AAPL) announced that the new iPad had sold fairly well. During the summer, overall iPad sales topped 80 million (first- and second-generation models included). On October 23, Apple announced that it had sold 100 million iPads.
These sales numbers have caused many analysts to speculate about the reasons why the Cupertino, California-based enterprise would release a brand-new iPad only seven months after the last.
On Monday, we provided our own analysis of the iPad and its future.
"By releasing the iPad 4 and iPad Mini simultaneously, Apple can cut the prices of its older models all at once and let consumers decide what they want right now," Benzinga argued. "If they choose the third-generation iPad, Apple can rest easy knowing it still got a sale. If they choose one of the newer models, the company will gain higher profits. Either way, Apple wins."
As it turns out, Apple will not continue selling the third-generation model. The iPad 2, however, will remain on the market for $399. Nonetheless, Our argument still applies. It does not matter which iPad consumers buy because Apple will still make a profit.
We also argued that Apple would release the fourth-generation iPad to prevent consumers from anticipating a spring 2013 release.
"One of Benzinga's former news analysts waited 18 months to purchase a new MacBook because he was always eager to see what the next upgrade would be -- and, as it turned out, the one after that. If Apple releases the iPad Mini this fall, it could lead to a similar dilemma. It may create a situation where consumers are too afraid to buy an iPad because they wonder when the next iteration will be released."
By upgrading the full-size iPad right now, Apple has eliminated this risk.
While those were justifiable reasons for Apple to upgrade its tablet, some analysts believe that the third-generation model had become a "stale product." This forced Apple to upgrade the device a few months early in order to re-ignite sales ahead of the holiday shopping season.
What does this mean for spring 2013? While Apple is an unpredictable company, it likely means that the firm will not release another iPad refresh anytime soon.
However, now that the company has upgraded every product in its current lineup, there is not anything left to refresh during the early months of 2013. This could mean that Apple will employ another slate of minor tweaks and improvements as it prepares for more significant enhancements later in the year.
Editor's Note: This content was originally published on Benzinga.com by Louis Bedigian.
Below, find some more great ETF and market content from Benzinga:
Downfall: Former Goldman Sachs Director Gupta Goes to Prison
Greece’s Days as a Developed Market Could Be Numbered
Short Interest Swings in Biotech Stocks
Benzinga Pro covers this and all market news in real time. Get your free trial here.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.