On March 8th, Apple announced the arrival of its Media Tablet, the “new iPad”, although it will very likely to be referred to, or renamed as iPad 3 once it hit the market. For the first time in iPad history, it will be made available in Australia, Hong Kong, and Singapore on the same date as the U.S. launch, on March 16th, 2012.
Perhaps the biggest feature update in the new iPad is the arrival of Retina display on a tablet device. The new iPad sports a resolution of 2048x1536 on a 9.7 inch, 4:3 aspect ratio screen, by far the highest resolution screen available on a tablet today. The resolution on the new iPad is actually higher than most HD monitors and HDTVs commercially available. Other hardware features on the new iPad includes the new dual-core, Apple branded A5X processor with quad-core GPU, 4G LTE connectivity, and much improved camera.
Interestingly enough, the new iPad’s 4G capability will only be enabled with selected partners in North America for the time being. With so many countries on the initial launch date, customers outside of North America are limited to 3G connectivity. Carriers in the three Asia/Pacific countries on the initial launch list have all introduced LTE enabled devices in their respective markets. It seems that the decision of limiting LTE to North America is business driven rather than due to technical limitations. IDC does expect Apple to release updates in the near future that will enable LTE in the Asia/Pacific region once it finalizes agreements with regional carriers - and when the carriers introduce iPad-specific LTE data plans.
On the software front, Apple has rolled out iOS 5.1 to support the new iPad. Apple has also introduced iPhoto for the iPad, and at the same time updated iMove and iWork to take advantage of the new camera and screen. With the new iPad, Apple now has the complete iLife and iWork suites of products available on its tablet platform.
With the announcement of the new iPad, Apple seems to be repositioning its tablet to become more of a content generating device. Traditionally, Media Tablets live in a grey space between PCs (content generation) and smartphones (content consumption), where it can generate some content, but mostly as a device to consume. The new iPad has the hardware guts and software support to become a more serious threat to full PCs in luring away first time PC buyers as well as PC users looking to replace/upgrade in markets with more affluent consumers. In fact, IDC believes that the upcoming generation of Media Tablets, not just the iPad, could become more capable replacement to traditional PCs, and thus increase the cannibalization effect on PC sales on the consumer market.
While there is no denying that Apple dominates the Media Tablet market, some consumers in the Asia/Pacific region could gravitate toward to more compact-sized iPads, even if the smaller Samsung-based tablets have had limited traction thus far. This is due how tablets are utilized in many countries here: more consumers use tablets on public transit or while standing up, where the iPad’s relatively bulky size becomes less of an advantage. The Asia/Pacific region represents some of the fastest growing tablet markets in the world, and the new iPad, while impressive, may not always fit Asian consumer lifestyles. It will be interesting if rumors surrounding smaller-sized iOS-based tablets eventually come out to cater to that demographic.
Of course, the arrival of the new iPad means the current generation iPad 2 will become more affordable. However, IDC is doubtful the cheaper iPad 2 will connect with all Asian buyers. Consumers in Asia/Pacific, while price sensitive, could be more likely to buy into the latest technology, in part simply because of its use as a status symbol. At USD$399, the iPad 2 is still priced at a level where arguably superior Android based tablets live, and Apple may find the cheaper iPad 2s less of a hit with consumers once the new iPad becomes available.
Where iPad 2 could succeed in Asia Pacific is the education and public sectors. At a cheaper retail price of USD$399, Apple could potentially make iPad 2s even cheaper by "white-boxing" (or unbranding) them, thus making the tablet more attractive to Asian institutional buyers. Many governments around Asia are actively evaluating bringing tablet solutions into classrooms (Thailand is a good example), which is in line with Apple’s own aspiration of making the iPad an educational tool. iPad is an incredibly sticky solution given the ecosystem support it has. So it may be worth Apple’s while in making iPad 2 a loss leader into Asian institutions.
Another opportunity for iPad 2 would be in the commercial sector, which may be a hit with Asia/Pacific enterprises. At a lower price point, enterprise may be more willing to make tablets available for their employees. Even without the fancy bells and whistles of the new iPad, iPad 2 is still a solid performer in corporate environment, especially when it comes to mobility. In fact, Apple has been able to make headway into the enterprise without much effort on its own. IDC believes that the iPad 2 could potentially break through with many enterprises in the region with applicable use cases, proper management, and a more active local sales force.
Overall, Apple’s new iPad is more evolutionary than revolutionary, despite the impressive advances made. Regardless, the new iPad will be a big hit in the region. With the new iPad becoming available in Australia, Hong Kong and Singapore on March 16th, and Macau a week later, IDC anticipates that the new iPad will be a big grey market item for the rest of Asia - including China. While Apple's current legal battle with ProView may slow down the new iPad's adoption in mainland China, many retailers will nevertheless carry grey market iPads as the profits on the new iPad prove to be too lucrative to pass up.
For the Asia/Pacific markets, Apple could be leaving money on the table by not addressing the potential need to have a more compact iOS-based tablet. Nevertheless, the iPad announcement is a glimpse into Apple’s overall iOS roadmap for 2012. IDC expects that many features in the new iPad will make it into the iPhone 5, which is surely to be announcement later in the year. More importantly, the upcoming iPhone announcement may be Apple’s last chance to bring a larger smartphone (or a smaller tablet) to the market in order to complete its portfolio of iOS devices.