Why did Apple announce a new iPad so soon after iPad 3?

Stephen Lawson
5 November, 2012
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Only seven months ago, Apple execs appeared on stage in San Francisco to a roaring crowd giddy with anticipation. With great showmanship-or is it salesmanship?-Apple CEO Tim Cook unveiled the next big thing: the New iPad.

Apple faithful rushed to get one, standing in lines for hours and spending anywhere from $539 for a 16GB WiFi-only version to $899 for a 64GB WiFi-plus-cellular version. Three million New iPads were sold over the launch weekend. All tallied, Apple has sold 100 million iPads in two-and-a-half years.

Customer euphoria, however, didn’t last very long.

Last month, Apple unveiled the fourth-generation iPad with little fanfare, drowned out by the pricey iPad Mini. The fourth-generation iPad boasts a faster chip and a “lightning” connector yet costs the same as the New iPad, which, we’re assuming, can now be called the third-generation iPad.

Third-generation iPad customers heard it loud and clear. They had paid for an iPad with only months of shiny shelf-life, whereas Apple normally trots out new iPads and iPhones once a year. A flash poll of 1,427 Apple consumers conducted by CouponCodes4u found that 41 percent had bought a third-generation iPad. Of those, 83 percent said they felt “cheated” by the announcement.

So why would Apple drop a fourth-generation iPad bombshell? The short answer: The iPad upgrade wasn’t big but a necessary one, both technically and strategically.

When Apple comes out with a new iPad, the company often discounts previous versions. But there’s no option to get the third-generation iPad at the Apple store; Apple discontinued the third-generation iPad last week. Officially, the fourth-generation iPad is called the “iPad with Retina display,” even though the third-generation iPad initially introduced Retina to the tablet.

Apple, of course, likely knew the third-generation iPad would be short-lived. In Apple’s second-quarter earnings call this year, shortly after unveiling the third-generation iPad, the company reported 2 million iPads in channel inventory, below the target range of four to six weeks.

“Part of the difference in [Apple's] third-quarter sales, we believe, is that they were actually scaling back inventory on hand of the new product, so that they could prepare to launch the next product,” says analyst Rhoda Alexander at IHS iSuppli.

It’s as if the third-generation iPad never existed.

Technically, Apple needed to get to the fourth-generation iPad. The third-generation iPad powered the high-performance Retina display with an A5X processor, but the fourth-generation iPad does it better with a dual-core A6X processor and quad-core graphics.

“In retrospect, should Apple have waited for the A6 processor?” Alexander says. “They may have pushed it, which required the update at this point.”

But it’s hard to fault Apple, she adds. “They had spectacular sales in the first and second quarters of this year, just dominated the market, recaptured sales they had lost the previous year.”

Regarding disgruntled customers, Alexander expects Apple will take a customer service hit. But Apple can offset this by giving customers a deal, perhaps letting them trade in their third-generation iPad for credit towards a fourth-generation iPad or iPad Mini.

“You can do this occasionally,” Alexander says. “If you do this repeatedly, you’ll have a problem. You’ll lose some of the value people place on the brand,” adding, “Apple can’t refresh the iPad in March because it would be unsettling to customers.”

All of this raises the question: When will be the next iPad update?

Strategically, the fourth-generation iPad coming on the heels of the third-generation iPad alters the upgrade cycle from the first of the year to the end of the year. “It’s a strong possibility,” says Alexander. “In the competitive tablet space, the fourth quarter has become the ‘it’ quarter for new tablet introductions.”

But this means that the next iPad won’t come out until next fall. Because the third-generation iPad and fourth-generation iPad are basically the same with the exception of a faster chip (and Lightning connector), the next iPad will be the first significant upgrade in 17 months.


6 people were compelled to have their say. We encourage you to do the same..

  1. AussieMacUser says:

    Isn’t another difference the fact that iPad4 will work on Australian 4G networks? (The ACCC forced Apple to retract its ads claiming that the iPad3 worked on Australian 4G networks, when it didn’t). If so, this is a major upgrade to ensure that the iPad remains competitive in Australia and markets with a similar (ie non-US frequency) 4G network system.

  2. Paul says:

    AussieMacUser your right about the updated iPad. The old one wouldn’t work on Australian 4G networks but the newly released iPad will work on Telstra’s & Optus’ 4G networks. I have no idea about Vodafone’s up coming 4G network but I’m sure it will be using the same 4G band as Telstra and Optus.

  3. Jen says:

    What about the heat issue? The iPad 3 can get uncomfortably warm in your hands. Has this been fixed with the iPad 4?

  4. MT 01 says:

    I’m totally sickened after buying 2 new ones for the family. After reading all the pro’s and con’s between Apple and Android products, I believed I’d be doing the right thing by my purchase decision, but not now and especially not since the iOS 6 update whereby I’ve experienced further disappointment in the product.
    I’m now beginning to realise people’s biased commenting with regards to Apple especially within related articles and topics. A company like Apple shouldn’t be reliant on playing games with the loyalty of their customers, its not good business and its not right. I think they should exchange them for the new version at least, especially if they’re under a year old. An even better solution would be to give me my money back Apple?

  5. Fabian says:

    well in response to both of your observations…..yes in fact we have been cheated….”Ipad 4 …the pad Australians should have got” 7 months ago. I wish i did return it under the ACCC ruling……as as you correctly state it now IS compatible on the 4 g networks….AS a total apple supporter…..my support now of late, starting to wear thin…its as if short term decisions are being made in order to gain profit and to be ahead slightly of the other guys with no consideration of the consumer…Mr Tim Cook should offer Australians and other affected countries the option to trade back with minimal loss and move well cared for 7 month old pads to US etc places that will utilise a radio chip frequency that works there, but not here….

  6. Lani says:

    It is hard to read

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