Is This iPad Dead?

Next Tuesday is Apple's (NAS: AAPL) iPad Mini day. This we know. According to a recent research note, Apple may even take the opportunity to kill an iPad at a time when Apple bulls will likely be cheering, "Long live the iPad!" Huh?

The iPad with a target on its back is likely the iPad 2. At least that's what Evercore Partners analyst Rob Cihra thinks. The iPad 2 was launched early last year, but remained in production this year. In fact, Apple even used the device as a low-volume and therefore low-risk testing ground for Samsung's 32-nanometer chip manufacturing process, quietly switching from the 45-nanometer chip behind the scenes this year.

That brought improved battery life with it, but more importantly allowed Apple to test drive Sammy's 32-nanometer node before subsequently migrating the all-important iPhone 5's A6 chip to the same manufacturing process.

The iPad 2 has played an important role in pricing strategy also, occupying a lower $399 entry-level price point while the third-generation model starts at $499. That puts a little bit of heat on's (NAS: AMZN) Kindle Fire and Google's (NAS: GOOG) Nexus 7, but at twice the cost of those devices, the heat may be more of a gentle warmth.Then again, that's where the iPad Mini comes in to crank up the temperature.

The $399 price point has been attributed to the tablet's increased uptake in the education market, but it also presents some strategic dilemmas, particularly with the introduction of the new iPod touch models.

Cihra believes Apple's grand scheme requires "clearer product tiers," in which case various iPad Mini models can occupy the lower end of the pricing spectrum. Pricing remains the biggest unknown, but could start as low as $249 for an 8 GB model, adding $100 for additional storage capacities. That could potentially put a 16 GB iPad Mini in close competition with the iPad 2.





iPad Mini*


16 GB*


iPod Touch


64 GB


iPad 2


16 GB


iPad Mini*


32 GB*


iPad 3


16 GB


Source: Apple. *Estimated.

That hypothetical lineup around the $399 vicinity is anything but clear. The iPad 2 has served its purpose well, but now it's gotta go.

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Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple,, and Google. Motley Fool newsletter services recommend Apple,, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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