Wednesday, February 29, 2012, 11:44 am PT (02:44 pm ET)
20% of non-iPad buyers would consider a $399 entry-level iPad 2With Apple expected to introduce its third-generation iPad next week, a survey of consumers not planning to buy an iPad shows that 20 percent would change their minds and buy an iPad 2 if Apple continues to sell last year's model for $100 less.
RBC Capital Markets conducted a survey of 1,100 consumers at the end of 2011 about their tablet buying plans. Among those who indicated they were not planning to buy an iPad 2 in the next 90 days, 20 percent indicated they would be "likely" to buy Apple's second-generation tablet if it were sold for $399 and up.
Apple's entry-level 16-gigabyte Wi-Fi-only iPad 2 currently costs $499, but there have been suggestions that Apple could continue to offer its second-generation model at a reduced price after a so-called "iPad 3" becomes available. The company already employs this approach with its iPhone lineup, as the latest-generation iPhone 4S is sold alongside the iPhone 4, first released in 2010, and the iPhone 3GS, which debuted in 2009.
Analyst Mike Abramsky with RBC said in a note to investors on Wednesday that if Apple were to continue to sell the iPad 2 at a reduced price, it could allow the company to not only expand its addressable market, but also head off lower-priced competitors like the $199 Amazon Kindle Fire.
Abramsky believes Apple's next iPad will include a quad-core "A6" processor, along with 4G long-term evolution high-speed data connectivity and a high-resolution Retina Display. He assumes that the next iPad will be on sale soon enough for it to have an effect on Apple's current fiscal quarter, which concludes at the end of March.
The next iPad is also expected by Abramsky to offer a glimpse of what Apple plans to include in its sixth-generation iPhone, expected to debut later this year.
"Like the iPad 3, iPhone 5 may include a quad-core A6 processor and LTE," he wrote. "Despite the success of the iPhone 4S, we believe these features along with a possible larger screen may drive a significant iPhone 5 upgrade cycle."
Apple on Tuesday officially announced next week's media event where it is expected to unveil its third-generation iPad. AppleInsider will have full, live coverage when the keynote kicks off at 10 a.m. Pacific, 1 p.m. Eastern on Wednesday, March 7.
On Topic: RBC
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