iPad 2 survives iPad Air, still costs $399

The device is $100 cheaper than the new iPad Air, featuring 16GB of storage and a much smaller bezel.

James Martin/CNET

Apple's iPad 2, which launched all the way back in 2011, isn't going anywhere just yet.

Apple's Phil Schiller announced on Tuesday that the device will remain on store shelves for $399. The offering comes with 16GB of storage and Wi-Fi, making it $100 cheaper than the new iPad Air, which will set customers back $499.

Given its age, the iPad was expected to be phased out. However, during Apple's special event, Schiller said customers want a $399 price point.

But is there more to Apple's decision to keep the iPad 2, rather than other, newer models? The Web is abuzz with reasons Apple might have made such a move, but ultimately, it could come down to one, simple thing: profits.

If it's true that Apple believes customers want an iPad for $399, the company had to decide which product to offer. The newer models with better features cost Apple more to produce, therefore cutting into its margins and reducing profit on each device it sells. By offering the iPad 2, Apple can maximize its margin and make the most money possible on each device sold.

Granted, Apple didn't say that it kept the iPad 2 because of margins, but it seems reasonable, at the very least. And perhaps more than anything, the move speaks to Apple's ultimate need to placate shareholders who push the company for higher profits.

 

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