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Apple reducing iPad 2 orders, but 'too early to tell' if it will be phased out

Apple has begun reducing orders for the iPad 2 ahead of the unveiling of a new third-generation iPad, but it's not yet known whether Apple will keep the iPad 2 around at a discounted price.

Sources in Apple's supply chain told DigiTimes that orders for the iPad 2 are gradually dropping ahead of an anticipated third-generation iPad. While iPad 2 orders are being reduced, orders for the next iPad, reportedly set to launch in March of 2012, remain steady.

Various reports have suggested that Apple will continue to sell the iPad 2 at a discounted price after it launches a third-generation iPad. Apple already employs that strategy in offering the iPhone 3GS, first released in 2009, as an entry-level handset, in addition to the iPhone 4, released in 2010, and iPhone 4S, which just launched in October.

DigiTimes, which has a hit-and-miss track record with Apple-related rumors, also believes that the iPad 2 will remain available at a discounted price in order to take on Amazon's $199 Kindle Fire.

With the reduction in iPad 2 orders, sources reportedly told the publication it is "still too early to tell" whether Apple plans to phase out the iPad 2, or keep it around following the launch of a third-generation iPad. "More observations need to be done in 2012 before the picture becomes clearer," the report said.

Apple has found great success in continuing to sell older iPhone models at discounted prices. As of August, the iPhone 3GS was still the No. 2 selling smartphone in America, and Apple is rumored to still be producing 2 million per quarter of the two-year-old handset, which continues to often outsell newer Android handsets.

Numerous rumors have suggested Apple plans to expand its iPad lineup in 2012, offering more models with different features at a number of price points, much like it already does with its MacBooks. The next iPad is expected to feature a high-resolution Retina Display like is already found on the iPhone and iPod touch.