Apple Forced to Release iPad 4 Because of "Stale" Sales

By
A A A

Did the third-generation iPad a flop at retail? Last March, Benzinga published exclusive images that revealed a surplus of units when the device went on sale. 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, Benzinga provided its 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, Benzinga's argument still applies. It does not matter which iPad consumers buy because Apple will still make a profit.

Benzinga 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 reignite 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.

Follow me @LouisBedigianBZ

(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: AAPL

Benzinga


More from Benzinga:

Related Videos

Stocks

Referenced

Most Active by Volume

83,946,369
  • $16.40 ▼ 1.20%
65,919,147
  • $102.99 ▲ 0.51%
63,004,409
  • $42 ▲ 4.53%
42,618,740
  • $7.93 ▼ 2.94%
41,388,613
  • $78.37 ▼ 0.41%
40,438,996
  • $3.81 ▲ 14.76%
39,835,674
  • $12.32 ▲ 2.41%
38,147,728
  • $12.83 ▼ 2.80%
As of 10/22/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com