Retailers Slash iPad 2 Prices Ahead of Anticipated iPad 3 Launch

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While speculation is rife that Apple (NASDAQ:AAPL) may come out with the iPad 3 on March 7th, the date for which the company Monday issued a media invitation, retailers such as Best Buy (NYSE:BBY) have started to slash iPad 2 prices in a bid to clear off their inventory. [1] It is common for retailers to slash the prices of electronic products in anticipation of the arrival of their upgraded versions. The iPad accounts for about 13% of our $550 price estimate for Apple stock. Our price estimate is about 5% above the current market price.

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iPad 3 Could Propel Tablet Industry’s Growth

According to one report, the iPad 3 could support 4G technology which means Verizon (NYSE:VZ) and AT&T (NYSE:T) could sell them on their 4G networks (Read Apple’s Ready to Roll Out 4G Enabled iPad 3 for Verizon and AT&T). These are overall promising signs for Apple.

AllThingsD also described the iPad 3 as a much advanced tablet stating:

A device similar in form factor to the iPad 2, but running a much faster chip, sporting an improved graphics processing unit, and featuring a 2048×1536 Retina Display — or something close to it. ((Apple to Announce iPad 3 First Week in March, AllThings D, February 9th, 2012))

The iPad franchise’s continued success bodes well for Apple as it leads the tablet market and has pushed Apple to the top of the “mobile PC” market, in which many analysts are now including tablets. NPD DisplaySearch reported that Apple is the largest mobile PC player (which include the tablets and notebooks) with a market share of about 27%. It also stated that nearly 80% of Apple’s mobile PC shipments were iPads, with the iPad commanding a market share of 59% in the tablet market. [2] See our note The iPad 3 Will Help Apple Stay Atop the Mobile PC Market.


Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Best Buy Slashes iPad 2 Price by $50 Ahead of iPad 3, AllThingsD, February 27th, 2012 []
  2. iPad pushes Apple to 26.6% of the mobile PC market in Q4, BGR quoting NPD DisplaySearch as the source, February 23rd, 2012 []