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Apple Just Changed Its iPad Pro Strategy | The Motley Fool

What’s interesting is that when Apple released its second-generation iPad Pro tablets back in June of 2017, it simply discontinued the prior-generation models instead of keeping them around at potentially lower price points. With this product launch, Apple did something different. Instead of dropping the older iPad Pro models altogether and offering the new ones at the same prices as the older models, it kept the older 10.5-inch model around with pricing unchanged and introduced the newer models at higher prices than the price at which their predecessors launched.

Let’s go over why Apple would embark on such a strategy.

Boosting average selling prices, supporting a pricier product
The new iPad Pro tablets are probably significantly more expensive to produce than their predecessors were — Apple really packed these products with a slew of feature upgrades. If this is the case, Apple likely was faced with two options with respect to pricing. First, it could keep pricing the same but take a hit on gross margins and, ultimately, net profitability.

The other option would be simply to price the new devices higher in the hopes that customers would find value in the added features and be willing to pay more. Those customers who didn’t find value would then have the choice of buying the older iPad Pro models at the same prices that they launched at. Apple likely can get away with that because, to be blunt, the company’s last-generation iPad Pro tablets are already head and shoulders above competing products.

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Apple Just Changed Its iPad Pro Strategy.