Apple’s New iPad – Will it Reverse its Market Share Decline?

Earlier today Apple held a release event to announce its latest generation iPads.  It also announced new Mac computers – devices that seemed mouthwateringly advanced, albeit of interest only to Mac users rather than PC users.

Apple has taken a pummeling in the tablet market place over the last several quarters, with its market share, which of course started at 100% with the launch of the first iPad in April 2010, and which had stayed impressively high for the first year or two subsequently, now showing steady declines and having been overtaken by the sale of Android powered tablets.

This seems to be the Apple story, repeated over again and again, and perhaps – probably – it is Apple’s deliberate policy.  To get as much high profit early-adopter sales as possible, and then to settle in to a comfortable niche as the market matures, continuing to sell units at the high-end but leaving the low-end to other companies.

Apple’s big weakness has been in the smaller, approximately 7″ screen size tablet market rather than the full size, around 10″ market.

Its first generation iPad Mini was slow to market, being released barely a year ago, and was unimpressive.  New Android devices since that time have served to further marginalize the iPad Mini’s appeal, both in terms of an unimpressive feature set and a way high price, and it seems that the majority of new tablet sales are with people choosing these smaller (and less expensive) tablets, rather than the full-sized tablets.

New iPad Air

Apple first announced a new full size iPad – now called the iPad Air.  It has the same 9.7″ screen as previous iPads, but is thinner and a bit smaller (less of a bezel around the edge).  Its weight has dropped from 1.4 lb to a much better 1 lb – the 1.4 lb weight quickly gets too heavy to hold, and while 1 lb is also appreciable, it is much better than 1.4 lb.

Oh yes, it has the usual ‘under the hood’ tweaks.  A faster processor, making it almost twice as fast in some tasks as the previous generation iPad 4, and 72 times faster than an original iPad with some graphics applications.  That’s an amazing statement – in 3.5 years, graphics speeds have increased 72-fold.

For the very few people who buy iPads with the wireless data option included, it now is compatible with a few more LTE high-speed data frequency bands, making it more useful in more countries.

Battery life remains about the same, at around the 10 hour point.

The price points are also the same, with an entry-level 16GB unit still costing $499, the same as all previous iPads.  Of course, no-one can dispute that this is a much better value for a much better product.

New iPad Airs are scheduled to start shipping on 1 November.

Apple’s Ugly Secret – How to Truly Price Compare Apples with apples

When evaluating price, you always need to be careful to make sure the two products being price compared are comparable in features.  The marketplace expectation about what should be included in a tablet is becoming more clearly focused, and there is now one thing which is expected to be included in a tablet, but which Apple does not offer.  When you factor that in to the price, the iPad becomes much more expensive.

We are talking about the lack of GPS in the basic model iPads.

When the first iPad came out, it was debatably acceptable that it had no GPS included as standard.  The GPS was part of a $130 extra option along with wireless data capability.  That remains true today, but over the last few years, it is fair to say that the enormous explosion in location-aware software programs has made a GPS close to essential on any type of mobile computing device, be it a phone or a tablet.

Most other manufacturers include GPS ‘for free’ in all their models.  After all, why shouldn’t they – almost all smart phones have it now, and a GPS module is tiny in size, light, and very inexpensive (we’re guessing about $10).

But Apple does not do this, and you have to pay $130 to get GPS functionality added (along with the largely useless wireless data capability that fewer than one tablet owner in six ever uses).

So if you want an iPad with GPS, your entry-level price rockets up from $499 to $629.  Ouch.  When you’re doing your model comparisons, make sure you’re comparing apples with apples, and not with Apples.  Compare the + $130 price of the GPS equipped iPad with the similar other make/model tablet.

Comparing the iPad Air to a Nexus 10

We are not going to provide a detailed comparison of the iPad Air to the current Nexus 10, because we expect the Nexus 10 will very shortly be replaced by a new Nexus 10.

But, suffice it to say, the current Nexus 10 units have a slightly higher resolution screen, GPS included, and entry-level units cost $100 less than comparable iPad Air units, with the $100 gap widening to $230 if you decide – as you should – that you want GPS functionality in your tablet.

When the new successor to the current generation Nexus 10 is announced, we’ll provide further comparison, however, with the new generation iPad alongside the old generation Nexus, it still seems the Nexus 10 is at least as good a device.

New iPad Mini

Apple then provided details of the replacement Mini iPad.  Despite some rumors to the contrary, it seems that it will indeed have the ‘retina’ type high-pixel density screen that the first version so sorely lacked.  The screen will have a 2,048 x 1,536 pixel resolution, the same as on the larger iPad Air.

It also has a faster processor, and about ten-hour battery life, and keeps the same $399 price point for an entry-level 16GB unit, but it too also asks for another $130 in order to provide a GPS unit, making its effective entry-level cost $529.

New iPad Mini compared to new Nexus 7

It is possible to compare the mini to the latest generation Nexus 7 which was announced three months ago.  The new Nexus 7 is probably the best of the current range of Android based mini-tablets, and so makes for a good unit to compare to the new Apple iPad Mini.

Based on these specifications, Apple has closed the gap in terms of features – indeed, it is fair to say it has a better screen than the Nexus 7, although the difference in screen size and resolution is small rather than massive.  The small differences in size and weight are probably not of great relevance.

The huge remaining discrepancy is in price.  The two comparable units cost either $229 (Nexus 7) or $529 (iPad Mini with GPS).  Yes, you can get two Nexus 7 tablets and still have nearly $100 left in your pocket, compared to buying just one iPad.

We’re not going to debate the esoterica of the respective apps, camera quality, etc, on the two different units, because truly these are esoteric things that end up not making any difference to our real life use of the units.  Most of us will use a tablet primarily for email, for web browsing, for eBook reading, for Maps, for casual photo taking, for social networking, and then, beyond that, for very little else.  Measured by these ‘real world’ standards, the two units are close to identical.

Apart from the price.  Clearly Apple has decided to wave away the major part of the tablet market – either that or it hopes that its brand name alone can justify the huge price differential between its new iPad Mini and the new Nexus 7.

Our recommendation is clear.  Get the Nexus 7.  Indeed, get two of them, and still have money left, compared to buying one iPad Mini.

Summary

We asked the question, at the start, if Apple’s new generation of iPads will reverse its market share decline.

It is true the new iPad Air represents a significant move forward in terms of smaller size and lighter weight.  These are worthwhile improvements, and people with first or second generation iPads should definitely consider the new iPad Air when they seek to replace their current unit.

But in the most active part of the market – the smaller 7″ screen sized tablet, which is where most tablet sales are occurring at present – the new iPad Mini, while closing the feature gap with comparable Android tablets, still remains an impossible distance away in terms of price, particularly when you truly compare Apples with apples, and add the cost of the essential GPS capability in to the lead iPad Mini price.

People who have already been preferentially choosing 7″ high value high performance Android tablets over the previous Apple iPad Mini have no reason not to continue doing so now.

To therefore answer our question, the full size iPad Air is a nice new product that will help staunch Apple’s high-end losses (with that part of the market being, by definition, less price sensitive) but the biggest weakness of the iPad Mini – its massive price penalty – remains unchanged and so we see the market continuing to move to the Nexus 7 and other comparable Android products.