Apple Inc. (NYSE:AAPL) is set to grab more of the tablet market with the imminent release of iPad 3 and the price cuts of the year-old iPad 2.

It has been a tradition for the Cupertino, Calif.-based company to give big discounts on older models when new models are released. It is expected that the latest generation iPad will be released on the March 7.

A price cut of the iPad 2 to $300 should help Apple woo people that are considering a Galaxy Tab, BlackBerry PlayBook, or Motorola Xoom for $300 or $400. Also, to compete with cheap tablets from Amazon and other device-makers, Apple has been rumored to be releasing an "iPad Mini" that has a size of 7 or 8 inches by the end of the year.

Moreover, Apple is sitting on a lot of cash. With money to burn, it could easily cut into the iPad profit margin or even sell the device is a much lower price in order to squash the competitors and win the tablet market. If the iPad dominates the market, it will benefit the company in the long run by offering apps and other services exclusively for iPad users.

Apple will largely benefit from the virtuous circle created by iOS and OS X. This is the same ecosystem that Apple created for the various iOS devices and iCloud and even extended with the integration of the full-pledge version of the OS X 10.8 "Mountain Lion." Apple managed to make a web system wherein various units work quite together. The increase in the sales of iPad will have a great impact to the future sales of Mac.

Apple competitors are really struggling. Rival tablets experience low sales as compared to iPad. The companies were forced to cut down the prices of their tablets and give out some form of incentive to attract consumers.