The iPad 2 Gets More Attractive

The new (not) iPad 3 with its great display and 4G got the big news, but the lower-key iPad 2 price drop may be of greater immediate interest.

Apple's biggest announcement last Wednesday wasn't the new iPad or Apple TV, GarageBand or iPhoto. For business professionals, the big announcement was the price drop of the iPad 2. Apple dropped the price of the iPad 2 $100, to start at $399. That's cheap. Comparing it to the original iPad, the iPad 2 is lighter, faster, thinner, has dual-cameras and is now $100 less. The new iPad, which starts at $499, has a faster processor, the sharpest resolution of any tablet on the market today and an option for more storage; but for business, the iPad 2 is already good enough. The screen—though not HD—looks great. The performance is better than the original, and it's lighter and thinner than the new iPad.

Neither iPad will cannibalize the other's sales because they are built for different markets. The new iPad is attractive to creative professionals for music and video. Students will want its faster processor to render media-rich textbooks on the Retina display with iBooks. Throw in Siri dictation for research and writing papers, and the new iPad, in 16, 32 and 64GB, is hard to beat.

The new iPad uses Siri technology to allow the user to dictate text.
The new iPad uses Siri technology to allow the user to dictate text.

Most business professionals will find that the new iPad is overkill. For them, the killer app on the iPad is reading. There is much I do with mine. I play games, watch movies, take pictures, and try out new apps for blogs; but I always come back to reading. I also see the same activity on my commuter bus, in line at the bank, or at work. Business professions are reading. After the announcement, I spoke with a colleague who was anxiously waiting for the new iPad, and he wasn't dazzled by the improvements because they're not in the places he's looking. He wants a lighter device with a smaller bezel that shrinks the size of the iPad; or better still, increases the screen without increasing the footprint. I agree. The processor, better camera, dictation, LTE, and a Retina display are welcomed improvements, but for $100 less he can get—what is for him—the equivalent. The iPad 2 only comes with 16GB of storage, which is more than enough for reading media and downloading the occasional movie.

The boring, last-year's-news iPad 2 suddenly looks like a good deal.

My colleague is not alone. An IDG survey found that IT and business professionals use their iPads most intensively for work-related tasks such as web browsing, reading and news consumption, not streaming videos, editing music, or making movies. So the iPad 2 has more than enough power and resolution for IT and business professional's needs. The survey also found that 59 percent "sometimes" use their iPad for entertainment, and 31 percent do so regularly. What are professionals reading? According to the survey - PDFs, Word and Excel documents sent by colleagues, as well as "must read" industry white papers.

The price cut also puts downward pressure on the original iPad. Again, this is just anecdotal, but an early Apple adopter in the office who already bought the new iPad offered me his original (also purchased on day one) iPad for $200. That's the cost of a Nook.

The decision to buy the cheaper iPad 2 is even easier for Europeans, where according to the Cult of Mac, LTE won't work. Europeans will get the U.S. version of the iPad, but European telecom companies plan to deploy LTE with different frequencies. The iPad will default to the slower 3G or HSPA+.

Between business professionals, those that hoped for a price drop, and international markets, I'm predicting a clear and noticeable spike in iPad 2 sales this year.

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