The new Apple Inc. (NASDAQ: AAPL) iPad Air 2 comes with an extraordinary set of new features, both compared to earlier Apple models and products from competitors. However, the tablet is relatively expensive. Among Apple’s challenges is whether people will pay $499 for the tablet.
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The $499 price is for the least expensive iPad Air 2. For this customers get only modest connectivity and capacity. This lowest priced version runs on Wi-Fi only and has 16GB storage. The highest priced version runs on both Wi-Fi and cellular and has 128GB, all for $829.
Based on many press and expert evaluations of the iPad Air 2, its feature improvements over the previous generation are too modest to drive a sharp increase in sales.
The company’s promotion of the new machine, in addition to other things, is meant to highlight the improvements:
The new iPad features an improved Retina display for enhanced contrast and richer, more vibrant colors, and better cameras for taking stunning photos and videos. Available in gold, silver, and space gray, iPad Air 2 and the new iPad mini 3 offer Touch ID and — in the U.S. — Apple Pay. “iPad is a magical piece of glass that runs more than 675,000 apps specifically designed for it, and is thin and light enough that you can comfortably hold it all day; the new iPad Air 2 is packed with amazing new innovations, weighs less than a pound, and at just 6.1 mm is the thinnest tablet in the world,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “iPad Air 2 has a new Retina display with anti-reflective coating, second generation 64-bit A8X chip, all-new iSight and FaceTime HD cameras, faster Wi-Fi and LTE wireless, and includes the revolutionary Touch ID fingerprint identity sensor.”
What’s at stake for Apple as it releases its new tablet? A great deal. In its most recently reported quarter, Apple sold 13.3 million iPads, which drove $6.9 billion of Apple’s total $32.4 billion in revenue. However, the unit sales number was down 9% from the same period a year earlier, which triggered an 8% drop in revenue.
Apple needs to reverse the slide in iPad sales.
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