Apple’s Trojan Horse-The iPad 12.9 computer

In last week’s ThinkTank piece, I stated that Apple, with the introduction of the new powerful iPad’s, was trying to change the rhetoric around these new products. Instead of directly calling them tablets, they talked about their computer like features and only once referred to them as tablets.

I also pointed out that these new iPad’s are closer to the original vision Steve Jobs had when he introduced the iPads in 2010 and suggested that someday an iPad could replace a laptop. In the eight years since the iPad has been on the market, it has become a go-to portable computer for many people. I can do about 70-80% of what I can do on my laptop with the iPad, and now that Adobe’s Photoshop and many other mainstream computer productivity apps are available on the iPad, these “tablets” are becoming more computer-like every day.

Earlier this year, I met with one the top execs of a major PC company who sells a lot of low end to mid-range laptops. This exec told me that the one thing Apple could do that would impact his laptop business was to introduce a computer for $799 or lower. I am sure he was relieved when Apple introduced the new MacBook Air with a starting price of $1199. But that relief might be short-lived. Given Apple’s new positioning of the iPad as a potential laptop placement, with a starting price of $799, his worst fears could be realized over the next year or two.

PC makers have, to date, argued that the iPad was way too underpowered to ever replace the laptop as a true productivity tool. Up to now, that has been true. But with the new iPads sporting Apple’s Bionic A12 processor that can compete for head to head with most of Intel’s Core i5 processors that are in the majority of mid-range laptops, that gap is narrowing.

If you look at Microsoft’s Surface, which is a tablet with a keyboard, this design concept has already gained some serious market traction. With the iPad’s new powerful engine and larger base of productivity software, at the very least these new iPad’s can compete head to head with Microsoft’s Surface. However, I believe that given Apples marketing muscle and new updates to their connectivity software that drives more and more of the Mac and iPad’s to cloud shared apps and services, it will, over time, allow them to compete directly with the mainstream laptop market.

This may especially be true with the 12.9-inch model. In the short time, I got to play with it in Brooklyn last week, I could see how it could evolve into a laptop replacement for me in the future. I do not doubt that laptops are not going away anytime soon and in fact, may even see some more growth in the next year or two.

But to underestimate the new iPad’s as a potential competitor to laptops would be a mistake. Apple’s posting of it as a computer says that they will continue to make it even more powerful and work with developers to create even more powerful productivity apps. Add to that Apple’s marketing budget and muscle that will clearly show how it could serve as a person’s main portable computer and you could see Apple potentially being quite successful with making the iPad a notebook replacement for many in the future.

If they do push to make the iPad a notebook replacement and it is successful, could that cannibalize their notebook business? Apple has done this before. The iPhone took out the iPod and Apple planned it that way. Last year, Apple sold 42 million iPad’s compared to about 25 million Mac’s. Keep in mind that Apple’s goal is to sell as many Mac OS and IOS devices and tie them to their growing echo systems of apps and services. I don’t believe Apple will ever discontinue their MacBook’s as there will always be a need for them by some customers, but I can see how many MacBook users who are not power users might default to an iPad Pro as an alternative to a laptop.

One other thing they did that makes it possible for the iPad to act as a computer is the addition of USB-C for the connector. It can now be used with a 4K monitor. There have been many attempts to try and make a smartphone the center of a PC experience and Samsung has created the DEX to tie their smartphones to a monitor and keyboard. But most smartphones did not have the kind of power you need in a PC to make it the center of a computing workstation.

These new iPads now sport PC class processors, and with an external keyboard, it will be interesting to see if people begin using it in this format to handle real-world productivity tasks in the future. While many reviewers dismiss Apple’s new positioning of the iPad as a potential laptop replacement, and this version may not be enough to get people to move from their laptops to an iPad Pro yet, I am convinced that over the next two years Apple will make this product more powerful and PC like and spend the kind of money and marketing to make it a serious option to a laptop.