How is iPad2 sales doing?

Previously I wrote about the popularity of $399 iPad2. In the second quarter, during the one month Apple had $399 iPad2, they sold 2 million units of this discounted version while the total number of units dropped to 11.8 million. The cheaper iPad2 accounted for 18% of the total iPads.

This is the first full quarter of New iPad and $399 iPad sold side by side. How did Apple do in their numbers? Apple sold 17 million iPads, 5.2 million more than last quarter. But they do not break down the splits. Following the math I showed before, we can find decent approximations of these numbers.

What can we say about these numbers?

The sales growth (units) is almost evenly split between iPad2 and New iPad. The new-ness and popularity of iPad2 likely contributed to the additional 2.7 million units.

The old $399 iPad2 seems wildly popular. Apple sold additional 2.5 million units for a total of 4.6 million iPad2.

How many of these 4.6  million are the trade-downs, those who would have bought new iPad had the $399 iPad2 not been there?

How many are truly incremental sales, those who would not have bought New iPad but were attracted by the value of $399 iPad2?

If we assumed 50% split between the two groups, and treat the profit margin as 47% for both,

Profit gained from incremental iPad2 sales: $431 million

Profit lost because of trade-downs: ($590 -399)* 47% * 2.3 M = $206 million

So a net gain of $225 million from keeping iPad2 around. Not bad.  But this quarter could be an anomaly because many of those who bought  original iPad two years ago upgraded to new iPad.

How many Kindle Fire sales were lost because of the $399 iPad2?

Unfortunately I do not have data yet because Amazon does not even release its aggregate Kindle numbers.