How Will the iPad’s Price Change With a Retina Display Model?

If the past is any indicator we’re coming up on the iPad’s next refresh. While we didn’t get a so-called Retina Display with the iPad 2, my gut (and other’s brains) lead me to believe that we’ll get something this year that can fill that hole in many people’s hearts.

Instead of discussing how this might affect users or developers, I want to take a look at how this will affect everyone, through one simple factor: price.


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On the iPad’s Pricing

Apple set the price to beat with the original iPad. I, like others, was amazed that Apple would release this game-changing device at such a comparatively low pricepoint. With iPod Touch models reaching the $200 mark, thinking that something much larger and more powerful would cost only 2.5 times that much was incomprehensible.

Current prices for the Wi-Fi only models.

Other manufacturers have been forced to try and match – or beat – this price or die. This has led to sub-par devices on each end of the spectrum, with some forced tradeoffs. Instead of an elegant, smooth aluminum backing others are used to chintzy plastic. Screens aren’t as responsive. Things simply don’t work.

And here are the prices for the 3G-enabled iPad models.

Or, at least, that used to be the case. Competitor’s tablets continue to get better, and it seems that everyone (with the notable exception of Amazon) is pricing their product to match the iPad’s. They simply can’t make a comparable product for a cheaper price. How can Apple continue to win despite their improvements? Cut the prices again.

Apple’s Model: Look to the 3GS

Apple is fine with selling older models of products, at least for a limited time. One needs to look no further than the iPhone 3GS, which is still kicking despite an original release over two years ago. Not only is the 3GS still being produced, it’s also continuing to sell, which can’t be said of devices from other manufacturers.

I mean, sure, they're giving it away, but still.

Now, Apple won’t sell you an original iPad (not a new one, anyway). With the release of the Retina Display model, though, I believe that the iPad 2 will stick around. Many people will continue to lust after the current model, and while $499 might seem like a throwaway expense to us geeks, it’s out of reach for many households today.

By looking at the 3GS, we can see how Apple might take advantage of the existing production infrastructure for the iPad 2 and lower the price, maybe even into the next release cycle. The iPad 2 is a fine tablet, and having it there gives someone some low-hanging fruit to grasp at without compromising on quality.

Introducing the iPad HD (Or Whatever They’ll Call It)

Now let’s look at what this iPad HD might cost. I only see two real options here: keep the existing prices or increase them by no more than $100. Anything more than that and most people will throw up their hands and say ‘it’s just a screen!’ Keep it at the same price, though, and all of the sudden that ‘just a screen’ becomes ‘look at that!’

The issue comes with the configuration options. I can see the iPad 2 keeping up with the 16/32/64 GB options, but with the increased amount of space that apps, movies, etc. will have to take up to look good on a Retina Display, the iPad HD may only be available in 32 and 64 GB varieties.

By doing this, and making the iPad HD 3G or (be still, my heart) 4G-capable, you can easily position the iPad HD as the elite new model and the iPad 2 as the more-affordable-but-almost-as-good version. Cut the iPad 2 to only having a Wi-Fi connection and it’s suddenly (with the combination of Apple’s new educational ventures) become the student’s dream assistant. Cheap, fast, good; it seems perfect.

What This Looks Like

So, if we were to look at it the way I outlined above, you’d have something that looks like this for the iPad 2:

  • iPad 2, 16GB, WiFi: $399
  • iPad 2, 32GB, WiFi: $459/$499
  • iPad 2, 64GB, WiFi: $549/$599

I left those fifty-dollar increments there because I think that Apple would love to say that they’re chopping prices by a hundred dollars across the board, with an even bigger discount on larger-storage models.

This leaves the other configurations for the iPad HD:

  • iPad HD, 32GB, WiFi/3G: $499/$629, $599/$729, or $699/$829
  • iPad HD, 64GB, WiFi/3G: $599/$729, $699/$829, or $799/$929

The first price is if they decide to use the base iPad 2 minus $100, second is if they keep the iPad 2’s pricing, and third is if they increase the iPad 2’s price by $100. Which will happen? I have no clue, but I would place my bet on the middle column. Maybe the end column will happen, but selling a 64GB iPad HD for only $70 less than the base MacBook Air will be a hard sell to the average consumer.

Conclusion

This is just what I see happening based on Apple’s past, their stated goals (getting the iPad into schools) and their standing as a business that is able to grab suppliers for essentially whatever price that they would like while also needing to remain competitive with other tablet makers.

Will this be accurate? I’m not sure. I’d be surprised if Apple priced the new iPad and the iPad 2 in a manner that I haven’t described here, but I’m prepared to be surprised. Either way I’ll be happy with a Retina Display iPad.