By Jason Snell
October 17, 2023 10:11 AM PT
The price of Apple’s old-products strategy
It’s an entirely innocuous announcement that says so much.
Tuesday’s reveal of a new Apple Pencil that’s got a USB-C port and lacks numerous features of both the first- and second-generation Apple Pencils sure seems like minor stuff.
Think about it for a moment, though: This is a product that, at least in part, addresses one of the most baffling features of the 10th-generation iPad: support only for the first-generation Pencil via a rickety Lightning-to-USB dongle. This seems to be the Apple Pencil that should’ve been shipped a year ago for that iPad. Why did it have to wait a year?
After that, though, one might start interrogating the structure of the entire iPad product line, but don’t poke a stick in there—you might get a face full of bees. It feels like the iPad product line isn’t quite coherent, but the mess at the low end is the consequence of Apple’s Tim Cook-era strategy to keep old products around to hit specific price points.
There was a time when Apple didn’t let old products linger. Last year’s model was discontinued and replaced by this year’s. But Cook and his team have taken to heart the fact that the longer a product is in production, the cheaper it is to make—and therefore, keeping old products around is one way to lower prices and reach markets for whom Apple products are otherwise too pricey.
This strategy has a lot of advantages, but it does create clutter when you’re shopping for an Apple product. While you would think that Tuesday’s announcement of the USB-C Apple Pencil would mean that Apple can finally send the original Pencil to the cornfield, it doesn’t—because Apple still sells the ninth-generation iPad, which has Lightning and therefore can only use the first-generation Apple Pencil.
The ninth-generation iPad still exists not despite the 10th-generation model being superior in every way but because of it. The newer iPad has great specs, but as a result, Apple has priced it at $449 ($419 in education). The 9th-generation iPad starts at $329 ($309 in education). Apple has kept the old model around because it knows some (most?) schools would balk at the price of the newer model. (It’s probably also the case that schools that have invested in old iPad hardware would prefer to keep using a model that doesn’t break compatibility with their investments.)
It’s the same reason that the $1299 13-inch MacBook Pro exists. It’s a “new” product, but full of old tech, and it makes the MacBook Pro line confusing… but Apple knows that some corporate buyers just won’t buy a non-pro laptop, and yet the $1999 14-inch model is just too rich for their blood.
Tim Cook’s Apple has foregone simplicity in its product lines, when necessary, in order to ensure that it doesn’t lose sales. Now, I could argue that the right thing to do was release the 10th-generation iPad at a lower price and take the hit on profit margin in the short term, but there’s a reason Apple is one of the world’s most profitable companies, and it doesn’t involve taking hits on margin. I could also argue that if the 10th-generation iPad was meant for the low-end market but couldn’t be priced to reach it, then it wasn’t designed right.
But by keeping old products around, Apple is also free to release updated products more often. If Apple had determined that it couldn’t sell the 10th-generation iPad at a price its education customers would pay, it could’ve just… not released the product. Instead, we’ve got a messy product line with two low-end iPads in it, but at least people who want to buy a more modern iPad can do so. And when the new Apple Pencil ships in November, they can even use it without a janky adapter.
Still, it’s hard to look at the shenanigans in the iPad product line over the last few years and not get the sense that things are kind of a mess. This new Pencil should’ve shipped last year with the 10th-generation iPad. The new iPad has features that higher-end models don’t. There’s insufficient differentiation between the iPad Air and the iPad Pro. (Leaving old models aside, it just feels like there are too many iPads, doesn’t it?)
It’s possible that we’re witnessing a reset, however. There hasn’t been a single new iPad announcement this year, and given Tuesday’s Apple Pencil announcement, it sure feels like there won’t be one. Perhaps 2024 will bring us a new wave of iPads that will finally make the product line make more sense. But don’t get your hopes up too much: Apple will probably still keep selling some old models, too. It’s what today’s Apple does.
If you appreciate articles like this one, support us by becoming a Six Colors subscriber. Subscribers get access to an exclusive podcast, members-only stories, and a special community.