No Design Changes Expected for Next-Generation $329 iPad, Touch ID and Headphone Jack to Remain

[Neodym]

Keep in mind, You mentioned the word ‘budget’ in your post, by adding certain technology, that increases the price point past the $329

I would expect that the price for "older" technology would decrease over time. Thus I'd see a theoretical chance for some of the components to go down in price so much that there'd be budget room for higher-cost tech like a laminated display (which itself should be cheaper nowadays than when it had been introduced).
But even if that'd be applicable, it's of course a completely different question whether Apple would be willing to go that route or rather stick to cheaper tech in order to increase margins.

 

[PickUrPoison]

I would expect that the price for "older" technology would decrease over time. Thus I'd see a theoretical chance for some of the components to go down in price so much that there'd be budget room for higher-cost tech like a laminated display (which itself should be cheaper nowadays than when it had been introduced).
But even if that'd be applicable, it's of course a completely different question whether Apple would be willing to go that route or rather stick to cheaper tech in order to increase margins.

It might be hard to believe given the sheer volume of “Apple is greedy/Tim Cook is just a bean counter/Apple’s going crazy raising prices on everything” posts by the Apple-hate machine on the forums, but Apple has been steadily driving down gross profit margin since the March 2015 quarter.

Last quarter (Dec 2018) had gross margin at its lowest point, 37.99%, since March 2014, except for the Sept 2017 quarter when it was just a bit lower at 37.91%. Its highest point over the last five years was 40.78%, in March 2015.

You can be sure that at $329, there’s less than the 38% average margin, whereas the higher-end configs of iPad Pro, iPhone XS/XS Max and Macintosh are well above 38% (though selling in comparatively smaller quantities). If they’re going to try to nudge the profit margin up, there’s not much in the $329 iPad that could move the needle.

 

[44267547]

Typing this on a new 2018 iPad (6th gen) I just got for $249 on sale at Best Buy today, for this price I don’t even care about the new one. I just need something that works since my gen 1 iPad mini will not do anything more than play music and alarm.

$249 is an absolute stellar price. Even at $329, it’s really about the iOS experience that Apple wants to introduce to somebody who may never owned an iPad before, and that leads them further to other Apple products, and the fact that they added Apple Pencil support, really does make this iPad more universal. I’ve said it before, there really isn’t a lot of necessary changes Apple needs to make with this iPad model (Maybe a laminated display would be nice) , and if they do make more hardware changes, it just increases the price point. Being this iPad really is targeted for the first iPad owner who has not owned one before and the educational sector, that’s why this iPad *needs* to be at $329.

 

[otternonsense]

Except everyone (well, clearly minus one) knows these are the lower-end iPads, so what exactlly is the basis of this fey complaint?

Oh, that's right: it's for self-described "power users" who don't have/want an iPad mini or lower-end iPad because they are "power users" and have long ago dismissed these products are too gauche for their power-user needs. Because they are the market and the market is them.

I'm only slightly surprised the plaintive, played out complaint about "being greedy and lazy" wasn't the top comment in this thread, just the third.

Of course Cook's expediency won't change anytime soon while consumers condition themselves to accept it and actively attack those who don't.

Jobs-era Apple consumers remember how routinely refreshing the form factor of a device, be it base or Pro, without significant pricing changes, was part of the overall appeal and value prop.

Whatever happened to that? Especially now that Apple can actually afford to refresh their entire product line at will. Why do you carry on framing the average consumer base like they're an amorphous blob that doesn't care what a device looks like as long as it's cheap? Why are you guys making excuses for Apple and paint critics as "plaintive" whiners?

 

[mingravity]

at least give them USB-c ffs.

 

[Phil Sledge]

at least give them USB-c ffs.

Why bother most of us Apple users only have lighting port cables to charge our mouses, keyboards, phones etc. I don't want another type of cable.

 

[PickUrPoison]

at least give them USB-c ffs.

I sure hope not. There are well over a billion each lightning devices, chargers and cables currently in use, while very few customers have USB-C-only Macs. Obsoleting the Lightning ecosystem is not going to happen anytime soon, and I don’t think iPhones will ever switch to USB-C. There’s no compelling reason.

USB-C makes sense for iPad Pro; 10 Gbps bandwidth allows several devices to be connected. For instance you can use a hub and have Gigabit Ethernet, a 4K/5K display, a USB hard disk, a USB keyboard, a camera, and a SD card reader. That type of requirement is uncommon and it’s firmly in the realm of iPad Pro, not the budget model.

Also, the USB-C connector is not nearly as robust as lightning and is more easily damaged. That’s an important consideration for educational settings. Kids can be hard on cables/connectors.

 

[mingravity]

I sure hope not. There are well over a billion lightning devices/chargers/cables currently in use.

USB-C makes sense for iPad Pro; 10 Gbps bandwidth allows several devices to be connected. For instance you can use a hub and have Gigabit Ethernet, a 4K/5K display, a USB hard disk, a USB keyboard, a camera, and a SD card reader.

That type of requirement is uncommon and it’s firmly in the realm of iPad Pro, not the budget model. Also, the USB-C connector is not nearly as robust as lightning and is more easily damaged. That’s an important consideration for educational settings. Kids can be hard on cables/connectors.

I agree 100% to what u said. but switching to USB-c is inevitable with iPhones adopting them as soon as 2020. Call me selfish but with almost all devices i have up for upgrade (in year or 2) i would love to have a single connector type across all of them. so sooner the better
[doublepost=1552304691][/doublepost]

Why bother most of us Apple users only have lighting port cables to charge our mouses, keyboards, phones etc. I don't want another type of cable.

one word "courage" . Serious note that will always be the case. And there is no denying down the line all these products will switch to USB-c. So why not now. but i partly agree with @PickUrPoison comment about usability and durability.

 

[Neodym]

[...] Apple has been steadily driving down gross profit margin since the March 2015 quarter.

Last quarter (Dec 2018) had gross margin at its lowest point, 37.99%, since March 2014, except for the Sept 2017 quarter when it was just a bit lower at 37.91%. Its highest point over the last five years was 40.78%, in March 2015.

Even if it itches me, I won't start a discussion here about the applicability of the term "driving down gross profit margin", when we're talking about ~38% minimum and a variance of ten percent, even if the term may be technically correct.

You can be sure that at $329, there’s less than the 38% average margin, whereas the higher-end configs of iPad Pro, iPhone XS/XS Max and Macintosh are well above 38% (though selling in comparatively smaller quantities). If they’re going to try to nudge the profit margin up, there’s not much in the $329 iPad that could move the needle.

A general trend in electronics is that prices are going down constantly. So if Apple would continue to sell basically 2018 tech in 2019 for 2018 (consumer) prices, chances are that their margins increase compared to the previous year. And because the entry-level iPad should have relatively big selling numbers, the effect should be visible on their financial result, even if the individual contribution per iPad would appear relatively minor.

But without knowing Apple's conditions and internal calculations, everything else is speculation from here on. The effect of e.g. putting a newer CPU inside, switching to a better display or adding more Ram could - or could not - be counter-measured by decreased component prices compared to last year.

And it is difficult to evaluate price changes without knowing BOM cost and Shareholder pressure. Regarding the latter, to me it seems that Cook-Apple has become less immune against Shareholder demands ("MARGIN! NOW!") compared to Jobs-Apple.

 

[nikaru]

It might be hard to believe given the sheer volume of “Apple is greedy/Tim Cook is just a bean counter/Apple’s going crazy raising prices on everything” posts by the Apple-hate machine on the forums, but Apple has been steadily driving down gross profit margin since the March 2015 quarter.

Last quarter (Dec 2018) had gross margin at its lowest point, 37.99%, since March 2014, except for the Sept 2017 quarter when it was just a bit lower at 37.91%. Its highest point over the last five years was 40.78%, in March 2015.

You can be sure that at $329, there’s less than the 38% average margin, whereas the higher-end configs of iPad Pro, iPhone XS/XS Max and Macintosh are well above 38% (though selling in comparatively smaller quantities). If they’re going to try to nudge the profit margin up, there’s not much in the $329 iPad that could move the needle.

The margins are average across all products so we dont know if the iPad has 2% margin while the Apple Store has 200%. The true is that price of the technology is dropping fast and Apple rarely reflects this in its prices. The margins are fluctuating. During the last months of the life cycle of a product, the margins can skyrocket. I rly think that Apple can boost their sales and be more honest with their customers, if the price of all products are reviewed on yearly basis and are ajusted to reflect price drop of the underlying components and manufacturing costs.

 

[cocky jeremy]

Give it touch id gen 2, for christ sake

Want nice things? Gotta pay for it.

 

[otternonsense]

Want nice things? Gotta pay for it.

We're paying PLENTY for it as it is.

Before Scrooge Mc Cook it wouldn't have cost you an arm and a leg for a minuscule feature update, and the benefits with each device gen release were immediate and useful.

 

[JLD94]

I'm kind of torn on this. Currently you can get the 128GB version for $330, I was holding out thinking that there might be a design change based on the 10.2 rumor. But if it's just going to be a processor I am thinking I would be fine with the current one for the price. If it added RAM, maybe.....but don't know if I feel that's worth an extra $100 either.

 

[PickUrPoison]

Even if it itches me, I won't start a discussion here about the applicability of the term "driving down gross profit margin", when we're talking about ~38% minimum and a variance of ten percent, even if the term may be technically correct.

Yes, actual facts can be irritating and inconvenient, even when they’re only “technically correct”. However, I live in the real world, so I prefer them to “alternative facts”. Ten years of gross margin data, Dec. ‘08 to Dec. ‘18, ranges from 36.87% to 47.37%. The last five years have been in a tight spread of 37.91% to 40.78%.

So despite complaints about price increases, we’re at the lowest end of that range. Do the facts support a beancounter CEO that’s gone crazy raising prices amidst a decreasing BOM cost? Obviously not, since either one (or both) would increase gross margin, not decrease it. And is 38% GM too high? Is Apple being greedy? Samsung’s is mid-forties, so 38% can’t be all that bad.

A general trend in electronics is that prices are going down constantly. So if Apple would continue to sell basically 2018 tech in 2019 for 2018 (consumer) prices, chances are that their margins increase compared to the previous year. And because the entry-level iPad should have relatively big selling numbers, the effect should be visible on their financial result, even if the individual contribution per iPad would appear relatively minor.

General trends aren’t relevant if BOM cost actually increases. We don’t know what 2019 will bring, but from 2017 to 2018, Apple added Pencil support, upgraded the SoC from A9 to A10, and for the cellular models, upgraded from category 4 LTE to cat 6 (doubling download speed from 150 to 300 Mbps). Prices were not increased.

That’s the opposite of selling last year’s tech at this year’s prices; we got this year’s tech at last year’s prices. A substantial upgrade, we got a much faster device (approximately a 40% increase in CPU and GPU performance) and Pencil support. And since the $329 iPad is almost certainly below the 38% margin average, sales pull down GM; the more they sell, the greater the negative effect on overall GM.

But without knowing Apple's conditions and internal calculations, everything else is speculation from here on. The effect of e.g. putting a newer CPU inside, switching to a better display or adding more Ram could - or could not - be counter-measured by decreased component prices compared to last year.

And it is difficult to evaluate price changes without knowing BOM cost and Shareholder pressure. Regarding the latter, to me it seems that Cook-Apple has become less immune against Shareholder demands ("MARGIN! NOW!") compared to Jobs-Apple.

We’ll never know BOM cost, and with margin actually decreasing over the last 4 to 5 years, if there are any shareholder demands for “MARGIN! NOW!”, not only is Cook quite immune to them, he’s apparently spiting them by doing the exact opposite.

 

[rowspaxe]

Lazy.....I guess they really dont care about ipads nowadays....

Its almost a 10 year old technology. I am kind of surprised at the passion here

 

[magicschoolbus]

Like many others in this thread - what exactly is the Pro offering over the base model at this point? It's the same limiting iOS that can't take full advantage of the processing speed in the higher end pros anyway - what's the point of the pro? A bigger screen.. yay?

This is coming from a 10.5 pro owner.. picked up one for $500 at best buy (the same price paid as my air 1.. which is about all I will spend on an iPad)

 

[danielsutton]

The seventh-generation iPad that Apple is planning to release alongside an updated iPad mini 5 will continue to use the same housing as the sixth-generation iPad, according to Japanese site Mac Otakara.

Prior rumors have suggested the device will feature a 10.2-inch display rather than a 9.7-inch display, but Mac Otakara says that it is hearing mixed rumors from suppliers. One supplier said that the display is "10 inches" but another said that the display size has not been changed.

Regardless of display size, the tablet is expected to continue to use a Touch ID fingerprint sensor rather than transitioning to Face ID like the iPad Pro models, and it will also still have a headphone jack.

Apple is expected to introduce both the updated seventh-generation iPad and a refreshed iPad mini at some point in the spring, perhaps right around the time of its March 25 event. Rumors have said the event will focus on software rather than hardware, but updates could be announced via press release shortly afterwards.

Mac Otakara says that it's likely both new iPads will debut at the same time, but the site did not provide any prospective launch timelines beyond mentioning that suppliers are preparing for a launch. Apple's current sixth-generation iPad sells for $329, and the new model is expected to be available at the same price point.

Article Link: No Design Changes Expected for Next-Generation $329 iPad, Touch ID and Headphone Jack to Remain

Would have been nice if Apple updated Touch ID to use ultrasonic in-screen technology is they can compete more effectively with Samsung. And, oh, lower the prices too. It is not worth spending $2,000 on a tablet, or even a phone for that matter. iPad and iPhone are very good products, but the pricing is obscene and customers would be better looking elsewhere if Apple keeps raising the prices like this

 

[Dethklok]

Why bother most of us Apple users only have lighting port cables to charge our mouses, keyboards, phones etc. I don't want another type of cable.

That's the problem. Everything should be USB-C so we don't have to deal with other types of cables, like lightning.

 

[bigboyz12000]

Still hoping for SE 2. If they can keep the iPad and iPad Mini alive, why not the SE?

Agreed! I think Apple is trying to allow the XR to flourish before they bring back or introduce another SE. Just my 2 pennies :]

 

[neomorpheus]

This is so that those low-cost iPad doesn't piss off people who paid $2200 for an iPad Pro. Apple needs to differentiate low-end and premium offerings. If they make 10.2' iPad $329, then what's the point of paying $899 for the 10.5' iPad Pro?

The easily bending feature?

Edit: Oops, hit the reply button too fast.

I thought you were talking about the IPP 11.

 

[jgdeschamps]

Regular iPads can’t handle huge Procreate files and, when Photoshop is launched, good luck running an A3 print at 300dpi on an iPad with 2GB of RAM or less. The main reason I got the iPad Pro over a regular one was because A) it was the only one to support the Apple Pencil at the time and B) I wanted as much screen real estate as possible. My iPad Pro served its purpose for a while but I got a refurbished one from Apple for £500 - the new prices are insane and when Wacom launched the Cintiq Pro 24 (about a year and half after I bought the Pro) I bought one for work and haven’t looked back. My iPad Pro is merely used for consuming media and being a baby monitor.

Saying all that, I know a lot of designers and illustrators that use one. Personally, I would (and did) invest that in a more practical device or invest in upgrading my computer but the cost is a drop in the ocean for businesses and freelancers when you can write it off against your tax.

Exactly... I also know a couple of designers and a photographer that got iPads (regular and Pro) for work, but they hit the ceiling quite fast of what they are capable of, and all of them wish they got a dedicated computer for their photo and art work. Very fast hardware, not a lot of RAM, and limited iOS capabilities is a combo that pounds that product to the ground.
Unfortunately, here in México artists and designers in general don't earn as much as they would if they lived in first world countries, so even with tax deductions possibilities, Mac hardware expenses hurt wallets a lot more.
It's a product that shouldn't have left the 250-600 bucks price range for the education/beginner in computing market.
If they were developed and exploited correctly, they could be able to substitute Macs in the near future. But nope, assuming rumors stirred up by Intel are correct, the current Apple administration solution is to put the Ax chips inside Mac laptops to alienate developers even more! Because this generation didn't get a chance to experience the wonders of a cumbersome hardware architecture transition for MacOS...

 

[eldo33]

I don’t see a problem here. The “classic” design is friend and true, really durable, unlike the bendy new design. Why does it have to change? For the sake of change? Excuse Apple for perfecting the design already, at least pre-FaceID.

Then we should have TUBE TV style like the old day then. LOL.

 

[bigchief]

Then you have people like me who still uses an iPad Air 32gig and it still does everything I need from it.

 

[PickUrPoison]

Would have been nice if Apple updated Touch ID to use ultrasonic in-screen technology is they can compete more effectively with Samsung. And, oh, lower the prices too. It is not worth spending $2,000 on a tablet, or even a phone for that matter. iPad and iPhone are very good products, but the pricing is obscene and customers would be better looking elsewhere if Apple keeps raising the prices like this

Apple stopped development on under-display fingerprint readers years ago when they cracked FaceID. They think it’s better for more of their customers than TouchID; you might disagree. But in any case I think there’s zero chance of them buying the fingertip reader from Qualcomm like Samsung did, since Apple and Qualcomm don’t get along.

btw that $2,000 tablet is a Samsung product; iPad is $329. iPhone XR is $749—exactly between the iPhone 8/8 Plus which were $699/799. Is that a price hike or a price cut? I guess the correct answer is “yes”.

 

[PickUrPoison]

Did we really? You’re just dropping SKU numbers like it means something.

iPhone: The XS is an exact replica of the X, and the XS Max its jumbo sized version. The XR, to me at least, was a cheap-ish mistake akin to the 5c.

iPad: The new iPad Pros were a refreshing redesign which soon turned out to be structurally flawed, hampered by typical iOS limitations and equipped with mutually incompatible peripherals with the previous Pro’s. So whether the end result was net positive for the user, the jury is still out on that. The 9.7 was just a hygiene/maintenance update on an unchanging shell that’s not even worth mentioning

Mac: what’s new about the 13/15 TB MBPs? Again, maintenance/hygiene updates. Mac Mini was a welcome maintenance update, and the MBP air.. what was the point of that even?! Do they even remember why it was first introduced as the “Air”? The 12” MacBook is technically Air-ier than the Air, no updates on that, no new iMacs and god forbid no Mac Pros

Series 4 watch: YES. That was a good one and probably the only solid, well rounded product update in the annual lineup that felt refreshing and new

What about iOS/MacOS? Both maintenance updates with nothing new to show. In fact, when it comes to the iPad and iOS 12, it’s frustrating that the ONLY change in a whole year was changing the gestures and control center for no other reason than parity with the iPhone X. No effort to make Siri suck less, other than poaching Workflow app and presenting it as “Shortcuts”.

HomePod.. oh dear. That lil’ thing went nowhere very fast.

So, when you take a closer look at it: really, where did all of this R&D investment go, other than to design bespoke pizza boxes for the spaceship campus? These are all hygiene updates on existing products, some with more pizzazz than others (e.g. the watch 4) but what was NEW to justify the lots of R&D expenditure?

PS. AirPower. Wah-wah-wahh

Yes, Apple spent $14 billion on R&D last year. You already saw some of the results of that spending last year; some you won’t see until this year, 5 years or 10 years from now. Some things will never make it out of the lab. That’s how R&D works.

Your rant is little more than the Apple-hate greatest hits. Let’s start with your first sentence:

“The XS is an exact replica of the X”.

So we’re discussing the results of R&D. Let’s take a look at the XS. It’s a better X in almost every way—and with no increase in price. It’s got 4GB RAM (increased from 3GB), a better camera with a new sensor, a new image signal processor, various improved picture and video modes, a better display, improved sound, IP68 vs. IP67 water resistance, dual SIM capability, faster FaceID, faster wireless charging, up to 15% faster CPU, up to 50% faster GPU and the machine learning neural engine co-processor has been upgraded from 2-cores/600 billion operations per second to an amazing 8-cores/5 trillion ops per sec—over 7 times faster. Amazing.

Also: stronger glass, better battery life, stereo video recording via four microphones, more supported frequency bands (including T-Mobile's 600 MHz LTE Band 71) and a faster “gigabit class” cellular radio that more than doubled the average download speeds and increased upload speeds by 50% over the X (stats are for US carriers).

All those improvements don’t just happen by magic; it takes money. So what’s your take on the upgrades of the XS, and the results of the R&D expenditures that are the subject of this discussion?

Nothing. Nada. Zilch. You might be ignorant of all the upgrades I mention above, or even worse, you deliberately ignore them. Instead, all you do is complain it looks the same as the X—as if that somehow negates all the improvements that Apple’s R&D efforts have brought.

The rest of your post is just more ridiculousness. You can complain about “maintenance” updates all you want, but upgrades are upgrades. For instance the 9.7” iPad update you don’t find “worth mentioning” had a 40% increase in CPU and GPU performance, and it also added Apple Pencil support—with no increase in price. HomePod sounds absolutely great and has sold 4+ million units in the US alone; not sure how many more billions in revenue it would have needed to earn before you would be satisfied, but no matter. And yes, AirPower is almost 4 months late—and counting! But it’s hardly the end of the world, and I have no doubt it’ll be another billion dollar product.

So this year we’ll have new iPhones, probably Watch series 5 and a new iPod Touch; iMac is due to be updated; AirPods, iPad/iPad mini, Mac Pro and new Apple-branded displays will be released; possibly the 12” MacBook; MacBook Pro will likely get its usual yearly upgrade; and of course Apple will release the new MacOS and iOS yearly updates.

But I’m sure it won’t be good enough for you. I don’t expect you will ever be satisfied, but again, that’s not relevant; Apple (and Mr. Cook) can take all the complaints you can dish out. Apple’s actual customers are satisfied, year after year, and that’s what counts. That continuing customer satisfaction drives huge revenues and profits. How frustrating that must be for you! Oh well. Complain, complain and complain some more. It’s of no consequence.