Apple replaces iPad 2 with iPad 4, launches cheaper iPhone 5C

Tue Mar 18, 2014 9:26pm IST

An illustration picture shows application icons on an Apple Ipad tablet held by a woman in Bordeaux, Southwestern France, February 4, 2013. REUTERS/Regis Duvignau/Files

An illustration picture shows application icons on an Apple Ipad tablet held by a woman in Bordeaux, Southwestern France, February 4, 2013.

Credit: Reuters/Regis Duvignau/Files

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(Reuters) - Apple Inc (AAPL.O) said it would offer an iPad 4 tablet in place of the mid-range iPad 2 at the same price and the company launched a cheaper, lower capacity version of its plastic-backed iPhone 5C in Australia, China and some European countries.

The iPad 4 is available at $399 for the 16GB Wi-Fi model and $529 for the 16GB Wi-Fi + cellular model at the four major U.S. carriers - AT&T Inc (T.N), Sprint Corp (S.N), T-Mobile US Inc (TMUS.N) and Verizon Communications Inc (VZ.N).

The fourth-generation iPad, which has a 9.7-inch Retina display and supports 4G carriers worldwide, was launched in 2012, while the iPad 2 was launched in 2011.

Apple discontinued the iPad 4 last year when it launched its current flagship tablet, the iPad Air. The company had cut the price of iPad 2 to $399 in 2012.

Tablets based on Apple's iOS platform held 36 percent share of the market in 2013, trailing those based on Google Inc's (GOOG.O) Android software that had 62 percent share, according to research firm Gartner.

Apple also launched on Tuesday an 8GB iPhone 5C priced at 429 pounds, 40 pounds cheaper than the 16GB version, according to the company's UK website. (link.reuters.com/vyx67v)

The 8GB iPhone 5C will also be available in France and Germany.

"We believe this newly configured device will have a lower gross margin as we estimate the difference in cost to Apple for the 8GB of NAND is $5 to $10," Cross Research analyst Shannon Cross wrote in a research note.

Analysts have said earlier that the iPhone 5C, which is about $100 cheaper than the iPhone 5S, was unable to grab market share from rivals offering lower-cost phones based on Android.

Apple's shares were up 0.5 percent at $529.60 in noon trading on Tuesday on the Nasdaq.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila and Kirti Pandey)

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