With Apple sending out invitations for a new product launch on March 7 in San Francisco, the iPad watchers are once again starting to speculate not only about features, but a new pricing paradigm -- including what happens to the iPad 2.
Apple was not immediately available for comment on the launch, but based on the photo in the invitation, it appears to be a new iPad with an ultra high-definition display. The invitation didn't offer specs -- or pricing -- but some industry watchers would expect to see Apple follow the footsteps of pricing models it adopted after multiple versions of the iPad and iPod entered the market.
"What I'd like to see is the existing iPad 2 remain on the market potentially at a lower price point," said Avi Greengart, an analyst at Current Analysis. "Even a small drop in price would certainly help. Some of the markets Apple has been talking about, like education, would benefit from a lower price entry point."
Greengart suggested that Apple could drop the price of the iPad 2 as low as $399 instead of starting it at the standard $499 for the entry-level model. Even a $50 drop in the price point could be a motivator for some customers, and in fact Best Buy has already lowered the price of the iPad 2 by $50.
"It's not that $500 is that expensive if you are comparing the iPad to other computing products. But still, Apple is pushing the iPad into a lot of different places and there are a lot of applications that make the iPad the most versatile tablet on the market," Greengart said. "At the same time there are people who are priced out of a $500 iPad. If Apple can maintain its margins while lowering its price, it would certainly be wise to do so."
Another way to handle the cost factor is with subsidies. Some analysts are calling for wireless carriers to subsidize the delta between the version that has 3G or 4G connectivity and the Wi-Fi version.
Greengart said subsidies may be a sticking point in the negotiation between Apple and the carriers, but the fact remains that most iPads sold today are Wi-Fi versions, which deprives carriers of a potential revenue stream and limits where consumers can use the iPad.
Not Just a Tablet
Beyond the high-resolution screen, better cameras, LTE support and other features many iPad watchers are discussing, there remains a question mark around some of the apps. Microsoft has denied rumors that Microsoft Office is almost ready for the iPad. But that may turn out not to be true.
"I would expect Apple to talk about productivity," Greengart said. "A higher resolution iPad really is a computing device and you can create content on it, you can watch content on it, you can use it as a full computing device.
"I think we are going to see some software that's introduced along with the iPad 3, possibly even Microsoft, that shows off the message that this is a world-class computing device, not 'just a tablet'."