Tech journalists checking out Apple's new gadget - Getty Images via @daylife
The widely anticipated release of Apple’s new iPad apparently disappointed investors, leading to an initial sell-off of the stock. While the latest tablet isn’t groundbreaking, it consolidates Apple’s dominant position atop the tablet market and closes off most potential loose-ends on the hardware side competitors could use to gain competitive advantage. Even though we all knew what was coming, the new iPad is definitely a win for Apple.
Apple has been gradually losing its capacity to impress pundits and critics. And while that might have initially taken a toll, albeit very small, on the stock price, it shouldn’t. As analysts, bloggers, and tech journalists have gotten very good at anticipating what Apple’s next product launches will be, the company formerly headed by Steve Jobs has gotten that much better at consolidating their products' grasp on consumers.
iPad shipments will surge 52% in 2012 to 62 million, according to estimates by RBC Capital Markets, further extending Apple’s lead in the tablet world. With 74% of the market, competitors like Android and Windows-powered devices are light years away, with 21% and 4% of the market respectively. Research in Motion, in definite decline, holds about 1% of the market.
Shaving $100 off the iPad2’s price tag will further catalyze the market, helping Apple target more “price sensitive consumers,” according to RBC. While Amazon’s Kindle Fire is still significantly cheaper ($200), analysts at Enders Analysis suggest it shouldn’t have much of an effect on iPad sales; the Kindle provides “a different proposition to different customers.”
Going into the specifics of the product, Apple’s new iPad has “closed off all of the spec bullet points in which [competitors sought to gain competitive advantage].” The new dual-core A5X processor delivers four times the performance of NVIDIA’s Tegra 3, “while the 4G LTE eliminates one of the iPad’s biggest missing features.” Apple also added a 5 mega pixel camera and, more importantly, top of the line “retina” display, “the highest resolution screen on a tablet,” according to RBC.
All of these features feed into Apple’s strategy of building a powerful ecosystem: iTunes, iCloud, iOS, App Store, all of these working together to keep consumers stuck to Apple products. Add the refreshed AppleTV, which allows users to stream internet content on their TVs while giving them an extra display for their Macs, iPads, and iPods, and you have a 360 degree strategy. Apple is now targeting consumers on all four screens: laptop, cell phone, tablet, and TV.
Speculation that Apple was set to release a Television set of their own appears overblown, according to Enders. From their note:
We think it very unlikely that Apple would try to bid against local broadcasters for premium TV content around the world. Yet without its own content, an 'Apple Television' would mainly be used as a dumb panel connected to a Sky+ box or equivalent, and hardly worth Apple's name.
The company now headed by Tim Cook has pushed the envelope over the last couple of years, revolutionizing the way we listen to and consume music, search the web, and use mobile devices. After having blown expectations out of the water consistently, users and critics have gotten used to surprises and as a consequence have become inoculated from them, at least for the time being. That doesn’t mean Apple has stopped testing the limits.
