by Matt Kapko

Why Apple dropped iPad’s price to lowest yet

News Analysis
Mar 22, 2017
Computers and PeripheralsConsumer ElectronicsiPad

Apple cut the price of its entry-level iPad by almost 18 percent -- perhaps in a move to fend off Google in the education market. The company also refreshed the iPhone SE, introduced a red version of the iPhone 7 and announced a new video-editing app for social sharing.

Apple this week is releasing its most affordable iPad to date. The refreshed 9.7-inch iPad, which packs a Retina screen and Apple’s A9 chip in a device that effectively replaces the iPad Air 2, is priced at $329 with 32GB of storage.

The $70 price drop makes the entry-level iPad more competitive, particularly among schools that can now snag the tablet for under $300 at educational pricing. Businesses that are motivated by price and don’t require more advanced features in the iPad Pro will also be giving the iPad another look as a result of these changes, according to Avi Greengart, research director at GlobalData.

[ Related: Is Google pushing Apple out of the U.S. classrooms? ]

“This doesn’t seem specific to enterprise,” Greengart says. “If anything, it seems more oriented to education where there’s been a massive influx of Chromebooks into the mix.” Google’s Chrome OS powers almost six out of 10 computing devices shipped to K-12 schools in the United States last year, according to a recent report from research firm Futuresource Consulting.

Although Apple has been positioning its iPad Pro line for business professionals, there are many lines of business, such as checkout terminals, customer-service kiosks and various applications in hospitality, that don’t need those more expensive features, according to Carolina Milanesi, analyst at Creative Strategies. “Overall, it is a good move from Apple to try and get users to upgrade older models and continue to drive first-time buyer adoption,” she says. “For enterprises this is the form factor of choice.”

[ Related: First Look: New Apple iPad, red iPhone and iWatch gear ]

Apple is simplifying iPad naming scheme

The new entry-level tablet from Apple, simply called “iPad,” also represents a branding shift for Apple’s product line. “It was pretty complicated plus the naming scheme was very un-Apple,” Greengart says. “There’s no more Air. This is just the iPad. The iPad and the iPad Pro makes a lot of sense… it’s clear both in pricing and positioning.”

By downsizing on the variants of the iPad, which was first introduced almost seven years ago, Apple is making it easier for consumers to find what they want and what serves their needs, according to Milanesi. “What is interesting, however, is that the experience you get from any of the devices is not compromised,” she says. “This is not something many vendors do. You always feel there is a trade off, but not with iPhone or iPad mostly because you are running the latest OS and have access to the same ecosystem.”

[ Related: iPad Pro, iPad, and iPad mini 4: What are the differences? ]

One hang-up in Apple’s iPad streamlining effort — the iPad mini 4 — got a storage bump from 32GB to 128GB but the internal components lag behind the new 9.7-inch iPad and the $399 price tag remains unchanged.

In other product news, Apple discontinued the iPad mini 2 and doubled the storage capacity of the entry-level iPhone SE from 16GB to 32GB. Apple also continued to expand and reinvigorate its PRODUCT(RED) lineup of devices with a bright red aluminum version of the iPhone 7 and iPhone 7 Plus. Finally, Apple expanded the lineup of bands available for Apple Watch with a series of new striped woven nylon, Nike Sport and Apple Watch Hermes bands.

[ Related: New Apple Watch buyers face limited band selection ]

Clips, a video-editing app for social sharing

One of the more interesting moves from Apple this week came in the form of Clips, a new iOS app that helps users edit video clips, photos and music to create videos for sharing on social networks. While the videos created by Clips look strikingly similar to “stories” on Snapchat and Instagram, Apple is focused on simplifying the creation process for its users instead of launching a new social platform.

“Clips is about content not social,” Milanesi says. Apple is staying close to what it knows — creating and editing content — and letting users share that media on any platform of their choice, she says. By taking a creator-centric approach to social content, Apple could also increase device usage and overall loyalty to the iOS platform, according to Milanesi. “In a way, if the engagement of creating the content moves to Clips [users] are leaving Snapchat and the rest to merely be the delivery mechanism.”

Still, the move is new from Apple, which has usually embedded these types of features into the camera app. The company also could have introduced Clips as a feature within iMessage, but it decided to create a standalone app for video editing that is less complex, and perhaps attractive to more iOS users, than other video-editing apps. Apple says Clips will be available in the App Store next month. “It feels more like a need in the market for an Apple-sanctioned, so to speak, app for video editing that is simpler and more consumer oriented than something like iMovie,” Greengart says. “It’s positioned as a social-oriented video editing app rather than a technical video editing app or a trimming tool.”