In a press release Tuesday morning, Apple unveiled its latest 128GB iPad -- an update of the fourth-generation iPad (iPad 4), becoming Apple's largest ever storage provided on a tablet. Previously, the highest storage option for the iPad was 64GB.
The new models of 128 GB iPad ring in at $799 for the Wi-Fi only, or $929 for the version with 4G LTE connectivity. It features everything that debuted with the fourth-generation iPad which was released last October: Retina display, Lighting connector and iOS 6. The newest addition to Apple's growing iPad family will become available on Tuesday, February 5th -- four days before the launch of Microsoft's latest Surface, the Surface Pro.
The timing on the new model is no accident. NAND flash, which is what Apple uses in the iPad, costs far, far less than what it did a year ago, says IHS' Andrew Rassweiler. "Apple's cost per GB in NAND flash is currently around $0.55/GB. Last year it was nearly $0.90/GB," Rassweiler said in an e-mail. "So it's clear that pricing has eroded to the point that Apple can afford to offer 2X memory configurations while maintaining the kind of incremental profit margins they were making on the memory upgrades a year ago."
That means Apple's spending about $35.20 more for an upgrade that it's charging buyers $100 for, Rassweiler says. And that's on top of what people are already spending over the two other storage upgrades from the base model.
The new model comes as analysts are watching Apple's margins closer than ever, with fears that the iPhone, iPad, and Mac maker is losing its touch when it comes to maintaining high margins on its products. That's been especially true with iPads, with Apple's newer, less-expensive iPad Mini bringing in less profit per device than its bigger brother.
As for the rapidly rising cost of memory pushing up the bill of materials, this matters less to Apple, a company that can traditionally keep prices high. But Android devices, many of which are built to a specified cost and occupy the lower end of the price scales, will have less room to absorb around an increased production cost.
In announcing the product, Apple was keen to note that this device is good for "enterprises, educators and artists," as opposed to the standard consumer. That's a lucrative group to sell to, but far removed from the millions snapping up the entry-level model. However the 128GB iPad will still be an attractive product for a number of iPad users.comments powered by Disqus