In a move that surprised most of us here at TUAW, Apple updated its signature iPad to a fourth generation without end-of-life-ing its second-generation, budget iPad 2. This fall, Apple will offer three distinct iPad models for sale, with quite a bit of overlap between the choices. You'll be able to shop for (all prices are USD):
- The new new iPad. Starting at $499, the iPad with Retina display offers many best-in-class features including enhanced cameras and an improved CPU in addition to its signature display.
- The iPad 2. The bestselling iPad 2 features a budget $399 starting price, saving you $100 off similar fourth-generation models. It provides a full-sized iPad experience with excellent internals that continue to power nearly any app you throw at it, 19 months after its introduction.
- The iPad mini. With a trim form factor and a $329 bottom line, the mini will appeal to anyone looking for a more portable and economical alternative to the standard iPad. It features all the power of the iPad 2 in a slightly less expensive model.
As a field goes, there's just $170 difference between the entry models for lowest- and the highest-priced units. A lot of press has gone out today wondering why the iPad mini even exists in a market this tight. For me, the question is more about the iPad 2 and why Apple is keeping this unit alive. I think the answer to that question better explains the mini's potential appeal.
Apple wouldn't keep the iPad 2 around if it weren't selling, as Phil Schiller confirmed. "The most affordable product we've made so far was $399 and people were choosing that over those devices." Although that $100 split represents a huge technology difference, especially compared with the fourth-generation iPad, the iPad 2 keeps selling. Since the iPad 2 remains in demand, the price tag really must matter.
And that's what's going to create a market for the mini, I think, even more than its slender form factor. A budget iPad means that an Apple tablet isn't out of reach for many customers. It's priced on par with the iPod touch.
The big message Apple kept pushing over and over yesterday is that tablets aren't just bigger iPhones. They offer an experience that's fundamentally different. The mini is going to let many families buy into that difference this Christmas at an affordable price.
Yes, the $330 price is slightly more than many customers had hoped for and pundits had predicted, but that extra $70 matters, especially in this challenged economy. If you can afford it, the newly refreshed iPad is your best choice. If not, both the mini and the iPad 2 provide excellent alternatives for a first Apple tablet.