Stefan Mileschin

When Apple launched the 3rd generation iPad (as the new iPad), it also dropped the price of the entry-level 16GB WiFi iPad 2 to $399. Apple's products tend to hold their values exceptionally well, so this two-tablet strategy made sense. Apple also proved the success of discount-the-previous-gen strategy with its iPhone line, where you can now buy current, n-1 and n-2 generations of iPhones at prices separated by $100.

What's different with the $399 iPad 2 is that Apple used it as a vehicle to introduce a new hardware platform, or more specifically, a new SoC.

http://www.anandtech.com/show/5789/t...32nm-a5-tested