iPad 3 Launch: Will Apple Consider Aggressive Price Cuts?

The news about Sony's surprising decision to drop the price of its Tablet S by $100 soon after the launch has fueled rumors surrounding the price tag of Apple's next generation iPad.

Speculations are rife that Apple will launch iPad 3 early this year and the device will include a Retina Display and an upgraded processor (A6) from the dual-core A5 chip, currently used in the existing iPad 2.

Various reports are even suggesting that Apple may unveil two versions of iPad 3, with different price tags. While a low-end model is likely to enter the market at $299, the premium model (retina display, 2048×1536 resolutions) could cost the same price as iPad 2 (16GB, WiFi), which is $499, ZDNet reported.

The report made its speculations based on the fact that Amazon Kindle Fire is selling like a hot cake with its attractive $199 price tag. To compete with this, Apple may consider dropping iPad 2 price to $199 and then charge $299 for the entry-level iPad 3.

However, an additional report by ZDNet slammed all these speculations, saying that chances of an aggressive price cut for iPad 3 are very slim. The report provided certain reasons why Apple is not likely to engage in such aggressive price cuts.

According to the report, Apple is already selling iPads as fast as it can, and hence there is no need of a price cut. Moreover, a price cut would only increase unnecessary demands on the supply chain.

The Cupertino tech giant is not known for aggressive slashing of prices of its product lines, and the company knows pretty well that if the price of a product drops, there's no way to push it up again.

In addition, Amazon's Kindle Fire could be a threat for other Android tablets in the market, but not for the iPad. Therefore, on the basis of Kindle Fire's $199 price tag, an entry-level iPad 3 for $299 is out of question.

There could be a chance that Apple may do something drastic, but it won't happen unless there is a dramatic decline in iPad sales over the near-term quarter, said the report.

Meanwhile, RIM has also reportedly slashed the price of the PlayBook to just $299 in the U.S.

All the three models (16GB, 32GB and 64GB) of RIM's poorly-received iPad rival are now available for the same price on the BlackBerry online store. This means that the 64GB model costs less than half the price ($699) RIM charged at its launch in April last year.