All iPads Anyone think Apple would eventually only sell cellular iPads?

Discussion in 'iPad' started by bniu, Mar 26, 2014.

  1. bniu macrumors 6502a

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    #1
    Just my opinion, but I find non-cellular iPads to be "incomplete". Anyone think Apple would eventually one day simplify the line and offer only cellular iPads?

    I know the $130 cellular option includes plenty of profit margin, but what else goes into it? Isn't it just a simple cellular radio that Apple has to include?
     
  2. HenryDJP macrumors 603

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    #2
    What information do you have to prove the extra money for the cellular iPads has plenty of profit margin?

    I wouldn't think they will offer cellular-only anytime in the foreseeable future. There are plenty of people that use iPads only for home use or frequent places that offer free wireless and don't see any benefit to paying extra for something they won't use. Besides, having a non-cellular iPad allows Apple to maintain an entry-level machine for the budget conscious.
     
  3. carjakester macrumors 68020

    carjakester

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    #3
    When an ipad sits at home it doesnt need cellular. My 4 ended up sitting here so i cancelled my cellular plan and it sits on airplane mode now.
     
  4. MattInOz macrumors 68030

    MattInOz

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    #4
    Wifi started as a similar price upgrade. Then standard on some models, till now being standard everywhere.

    So maybe but...
    I think they would want eSIM to reduce part count and remove the SIM module cage as a source of issues. As well as other means to get the cost down to acceptable reduced margin. eSIM might also allow them to sell data packs via the AppStore, and take a cut to reduced margin.
     
  5. CEmajr macrumors 601

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    #5
    Not at all. The Wifi only 16gb model is the best selling one.
     
  6. Newtons Apple Suspended

    Newtons Apple

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  7. Macman45 macrumors demi-god

    Macman45

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    #7
    I've never personally bought a cellular Ipad, my reasoning being that I already have an iPhone with a contract.

    As far as Apple selling cellular only models? I doubt it..if they were to go down that road, I wouldn't be buying as new one.
     
  8. bronner macrumors newbie

    bronner

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    #8
    Because it is the cheapest. Would you buy a 16 GB contract free cellular iPad for the same price that the Wifi one is now so the option to use cellular is always available if you wanted it?
     
  9. maflynn Moderator

    maflynn

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    #9
    Dropping the wifi only models seems like a move that would only decrease sales. Why purposely exclude potential customers?
     
  10. donnaw macrumors 65816

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    #10
    I'm quite sure they have considered it. Yes, they make a nice profit on the cell models but when considering the extra manufacturing costs of all the different models it might make sense.

    People buy the wifi models only because they can't justify the extra expense. If Apple sold cell only but increased the cost by $10-20 over the current wifi only cost.I doubt it would affect sales. That slight increase on all those wifi only models might cover the margins made on the cell versions.

    Think about it, they would have only one type of case, one set of manufacturing instructions, streamlined order processing, better inventory control, etc. The US carriers would have to get over 'ATT/Verzion/T-Mo/Sprint' models (looking at you Sprint) and be willing to activate any model but I doubt that's much of a hurdle. Even Sprint wouldn't be willing to give up their profits for their ego.

    It all comes down to the savings in manufacturing/supply chain costs for so many different models vs the high profit margins made on the cell versions. Tim Cook is known as a really good bean counter. I guarentee he has run the numbers. They will only do it if it makes them money.
     
  11. HenryDJP macrumors 603

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    #11
    You and the OP are making some blanket statements as if it was factual. What proof do you have that Apple makes a nice profit on the cell models?
     
  12. mmomega macrumors demi-god

    mmomega

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    #12
    I'm glad they don't force me to purchase cellular plans or more for the hardware as I all ready have 2 MiFi (1 ATT 1 Verizon that are month to month turn them on whenever I need) so this saves us a bit of cash up front from buying 2 cell iPads.

    Now one could argue why not just have the cellular iPad as a wifi hotspot, well when I go out to a job site that doesn't have internet and I need to use my laptop I can just walk up with my MBA and the MiFi in my pocket and work, I don't want to worry about the expense of further protecting and having to keep watch over my iPad.
     
  13. donnaw macrumors 65816

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    #13
    Oh come on. Use your brain and some logic. Do you really think adding the sim tray costs $100+ per device? Of course not. Nobody outside Apple knows exactly what the margins are but logic says it's quite a bit. Just like the margins on storage. Do you really think doubling the storage from 16 gigs to 32 gigs costs $100? Or going from 16 to 64 costs $200? Go read some breakdown articles. Ones with the cost of parts.

    It's just business. Apple charges what they think they can get. And if you need cell or more storage you pay the greater cost because if you want an iPad you have no choice. They are in business to make money. They're not in business to do you any favors.
     
  14. iPhonemaster5S macrumors 6502

    iPhonemaster5S

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    #14
    Take a look at how much profit they make on storage upgrades, it's the same situation just adding an antenna and a sim tray.
     
  15. HenryDJP macrumors 603

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    #15
    Well that doesn't say anything. I'm asking for people to backup their statements they are presenting as fact.
     
  16. CEmajr macrumors 601

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    #16
    Okay so do you think Apple would eat the cost of making the cellular iPad the same cost as the current wifi model?

    Or the other option of leaving the cellular models the same price and discontinuing the wifi models.

    Doesn't make business sense either way so it won't happen.
     
  17. takeshi74 macrumors 601

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    #17
    There probably are others but I don't. Why would they offer less selection and take a hit to sales?
     
  18. mrkramer macrumors 603

    mrkramer

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    #18
    I can't imagine that there is much extra development cost to keep both models, so I don't see them dropping the wifi only models as enough people don't need the cellular that they would rather buy a cheaper wifi only tablet.
     
  19. Tigger11 macrumors 6502

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    #19
    The units cost $36 more in parts and manufacturing according to iSuppli between a cellular Ipad and the nearly identical non-cellular brother of the same size. In actuality it probably will happen that they will go to all-cellular, just like now you will activate cellular if you want. One of the quarterly conference calls said less then 1/2 of the cellular ipads had actually been activated. Cutting the number of SKUs in half for the ipad would help currently there are 40 SKUs for the iPad models currently for sale, halving that would help with production, stock issues, repairs etc. Thats why they worked to get all the cell models into a single ipad model, it would not be surprising for them to get rid of the wifi only and move to all ipads having LTE at the lower price in the next couple of generations.

    ----------

    They wouldnt take a hit on sales, they would just sell the LTE models at the lower (ie wifi price). It probably would help sales, because people would buy larger memory ipad because the LTE is now "free". Also all the phone companies would be pushing the now cheaper LTE iPads. Also if the every iPad was LTE, the delta would be smaller then the $36 from last fall, as the quantities for those parts would be much larger.
    -Tig
     
  20. Serelus macrumors 6502a

    Serelus

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    #20
    If anything they'll drop the cellular, and start selling wifi only models.
     
  21. Tigger11 macrumors 6502

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    #21
    Discontinuing the wifi's make business sense because you get rid of half your SKUs which is a big issue in the Ipad business with inventory, repair and manufacturing.
     
  22. andyw715 macrumors 6502a

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    #22
    When I get the original 16GB iPad Mini I talked myself into getting the cellular version, for 2 reasons.
    1- was the GPS, I thought at the time it would be cool to use it as a larger TomTom.

    2- was the ATT promotion at the time. $100 off with 2 year (10/month) add on to my family plan.


    I did actually use the cellular data somewhat. Never really utilized the GPS portion (like I thought I would).
    Now that tethering is part of the plans I wouldn't use it (cellular) at all since I always have my phone with me anyway.

    I sold the mini after a year and paid 90 bucks EFT for the ipad line. So #2 only became a $10 off.

    Now I have 32GB rMini (Wifi) and just use the hotspot on the phone to provide the necessary bits.
     
  23. kelub macrumors regular

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    #23
    Seems there are quite a few people misinterpreting the OP's question. It's not "would you pay more for a cellular iPad if it was the only option?" The question is "could it be feasible/cost effective for Apple to only make 1 product and to sell it at the expected price point?" I.E., the "cheapest" new iPad being $499, etc.

    The cellular iPad does have more than just the cell antenna, IIRC. The wifi version is also lacking a GPS module, so there might still be too much cost involved in basically flattening out the existing options and "eating" the costs. Maybe they rise the base model cost up to $529 and then only offer one option...? The market would likely accept a small price bump, and having the *option* there isn't the end of the world. I had a work-issued iPad 2 for a year before being given an iPad Mini to "test" (I've been testing it now for over a year). The iPad 2 is still used in my house extensively sans cellular, and guess what - it works just fine that way. Having the option but not using it isn't that big of a deal.

    I too would think that the costs of the components would have dropped by now to not be worth manufacturing separate items. I do believe that Apple (not being discouraged, ever, in reducing products for simplicity's sake) will eventually take that step if it is in fact more cost effective to make 1 product than it is to make 2 different ones.

    It's a speculative hypothetical question, meant to encourage dialogue, not animosity.
     
  24. CEmajr macrumors 601

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    #24
    Possibly but since none of us know the manufacturing cost difference between the cellular and Wi-Fi versions, it's really hard determine. Since the iPad is more used like a PC than a phone, I don't think the demand is really there for cellular to be the only version. I personally have a cellular iPad and an iPhone but I don't see too many people who use their tablets during commutes and such who would require cellular connectivity while on the go. Plus they can always tether to their iPhones. The usage pattern of tablets for most people doesn't command cellular data like phones do. For now the cellular model seems to service a niche market.
     
  25. ApfelKuchen macrumors 68020

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    #25
    No, they won't eventually sell only cellular models - not even if it cost exactly the same to manufacture both versions (after savings on manufacturing efficiencies, fewer SKUs, etc.). However, I doubt the current $36 bill-of-materials difference could be totally eliminated by efficiencies - there's a law of diminishing returns in high-volume products; the savings you get going from, say, 1 million to 2 million units is greater than the savings you'll get for going from 2 million to 4 million.

    The big thing standing in the way of eliminating wifi-only is perceived value. People expect to pay more for additional features/less for fewer features, and they hate paying for features they don't need. The first thing we'd hear in these forums is, "I don't need no stinkin' cellular, Apple's being greedy by not offering us a lower-priced wifi-only model!"

    It's similar in corporate/education markets, especially all those places using iPads only on-site (factories, warehouses, retail stores, etc.). They would definitely balk at buying a cellular-capable model when it wasn't needed. School districts would come under pressure to provide cellular data in order to bridge the digital divide... Effectively, it gives the other manufacturers a unique selling point, "Apple's unnecessarily over-priced. We'll be happy to sell you a wifi-only model for $100 less."

    The price gap between cellular and wifi-only models may narrow, but I doubt it'd ever disappear.
     

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