Among Apple's big announcements yesterday, the company said it will keep the iPad 2 in production at the same $399 price point that it's occupied for a year and a half. That model was originally released in 2011, and its components look a little outdated in late 2013. Yet there must be a reason Apple is keeping the device around.

Localytics estimates that the iPad 2 remains the most popular model, suggesting that demand for the iPad 2 remains healthy. It would seem that a notable portion of the market is perfectly happy with a lower-resolution display and slower processor, so Apple wants to keep the device around to satisfy demand. The iPad 2's continued existence goes to show how strong Apple's pricing power is. The company can sell a tablet released in 2011 for a significant premium to newer rivals with beefier specs. On the smartphone front, Apple still sells the iPhone 4 as well for $350 in markets such as China.

In this segment of Tech Teardown, Erin Kennedy discusses Apple's new iPads with Evan Niu, CFA.


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The article Why Is Apple Keeping the iPad 2 Around? originally appeared on Fool.com.

Erin Kennedy and Evan Niu, CFA, both own shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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