Apple to Sell 'Cheap' iPad to Fend Off Android: Report

Black and white versions of the new iPad 2.When Apple [AAPL  Loading...      ()   ] releases its new and enhanced iPad next week, the company will also re-launch a less expensive version of its current iPad 2 to combat cheaper tablets running Google’s Android operating software, according to a JPMorgan analyst report out of Asia.

“Expect higher resolution new iPad, but also a cheaper iPad 2 to defend against Android Tablets,” wrote Gokul Hariharan of JP Morgan in a note today. “PC vendors like ASUS have issued aggressive guidance on cheap Android Tablets. If Apple comes out with a multi-pronged pricing strategy for iPads, then Android tablets may again find it difficult to gain traction, except for very low-end ones like Kindle Fire.”

Shares of Apple are up more than 30 percent this year in anticipation of the iPad announcement next Wednesday. The device is expected to have 4G capability and even more enhanced features. Meanwhile, shares of Google [GOOG  Loading...      ()   ] are lower for the year and Amazon’s stock is up barely 3 percent for 2012.

It is not unprecedented for Apple to keep selling older models under a new pricing structure in order to take market share on the lower end. After introducing the iPhone 4S last October, Apple announced it would keep selling the iPhone 4 for $99, as well as an iPhone 3GS for free when accompanied with a two-year contract.

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team. Click here to see his full bio.

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