This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Apple Didn't Release a $299 iPad

NEW YORK (MainStreet) -- In the weeks and months leading up to Apple's (AAPL) Wednesday announcement of a third-generation iPad, there were rumors the company might introduce a $299 version to be more competitive against low-cost tablets such as the Kindle Fire and Nook Tablet. One version of this rumor claimed that Apple would debut a 7-inch iPad in the $249 to $299 price range; another claimed the company would introduce a cheaper 8 GB iPad 2; and some just speculated that the company could choose to slash the price of the baseline 16 GB iPad 2 to $299.

Needless to say, anyone holding out for that $299 iPad was probably sorely disappointed. Apple did cut the price of the iPad 2 from $499 to $399 and has even gone so far as to offer a refurbished version for $349, but that's as low as it's willing to go, at least for now.

"Some thought Apple would try to conquer the market by dropping the price of one of its iPad models to $299, but a price drop wasn't part of the company's Wednesday announcements."

"The pricing strategy they're implementing is not a market-share growth strategy -- they pretty much own their segment of the market -- it's a margin protection strategy," says Rob Enderle, principal analyst at The Enderle Group.

In other words, the company thinks being too aggressive in pricing the iPad 2 might actually do more harm than good. It would cut into profit margins and there is not enough competition to justify that loss. Instead, Enderle says the company dropped the price just enough "so if someone wants something cheaper, [the iPad] is within shooting distance."

All of that could change in the coming months if another 10-inch tablet such as Amazon's (AMZN) rumored follow-up to the Kindle Fire were to come out and start taking market share away from the iPad. If that happened, Enderle says Apple might be more willing to cut the price to stay competitive.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs