Is iPad 2 getting cheaper?

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Apple will debut its most significant overhaul of the iPad today in the United States. It is not sure yet that this will be an iPad 3, because it could be also an iPad 2 S or something completely different. For competitors trying to cut a slice of the the tablet market, however, the most important question is what the company does with the older models already on the shelves.

Apple is expected to reduce price of the existing model from $499. That would squeeze rivals such as Amazon.com, whose $199 Kindle Fire is targeted at budget-conscious customers.

The company has cut the price of older models to attract bargain-hunting shoppers when unveiling a new product aimed at the high end. This strategy was used with success on the most recent iPhone. While today’s focus will be on the new version, which will have access to speedier wireless networks, the iPad 2 price cut may have more significance to makers of cheaper tablets that haven’t been able to match Apple’s success.

The new device will put pressure on competitors who are trying to undercut the iPad on price. The tablet market has changed in the past few months with the arrival of Amazon.

When Apple introduced the iPhone 4S in October, it reduced the price of the iPhone 4 to $99 and the made the iPhone 3GS free with a two-year wireless contract. Older models account for about a quarter of total iPhone sales, according to the company.

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