Could this be Apple’s secret plan for the new iPad?


Introduction and upgrade cycle

Yesterday, Apple’s launch event saw two new products being added to the iPhone and iPad lineups. First, there was the iPhone SE, featuring the same body as the outgoing 5S but with more powerful internals and a better camera. Next came the 9.7-inch iPad Pro, which borrows the name, some of the internals, and the accessories of its larger brother.

The 12.9-inch iPad Pro, launched in November last year, was certainly a departure from what came before it. The device had the same overall design of the iPad – a big, all-glass rectangle – but included new accessories, like the Apple Pencil (a stylus) and Smart Keyboard (which doubles as a case). The screen was also about three inches bigger than the iPad Air with more pixels and better technology that provided richer, deeper colours.

The 12.9-inch iPad Pro which Apple launched last autumn

Upgrade economics

All of this comes against the backdrop of one big, inconvenient fact: Consumers are not buying iPads like they are buying iPhones. That’s not just in terms of scale – although there is a big difference in scale – but also in terms of the upgrade cycle.

With the iPhone, consumers replace their handset every two or three years. A phone is carried around all the time and, as such, incurs some wear and tear. This, paired with an 18 or 24-month contract, means that Apple can reliably predict that people who bought an iPhone 5S will get a 6S, and so on. People who bought the first iPad, however, are still holding on to it – over five years later.

This upgrade cycle is much the same as a laptop or desktop computer. Unlike a phone, a PC does not come with a contract and is generally well preserved (especially true for a desktop) as it isn’t carried around in a pocket. The components used in a PC are also more robust than a phone – thanks mainly to the available space – and they wear out more slowly, which is especially true for the battery in the case of laptops.

When the iPad launched, Apple was likely unaware that people would hang onto them for so long, but that’s the reality of the matter, and the company has been struggling to convince investors that its tablet business is actually okay, despite falling unit sales year-over-year. The strong start – 30 or 40 million iPads a quarter – has been reduced to around 20 million, sometimes lower, and this has become an awkward red mark on Apple’s otherwise sterling financial performance.

iPad Pro

Enterprise expansion

The iPad Pro was an effort to kick-start the iPad’s growth in a new sector: Enterprise. The iPad was already popular with big companies but mainly as a toy for executives to use. By adding the ‘Pro’ name – which, it’s worth noting, appears on a lot of PCs – and the stylus/keyboard combo, Apple made it more explicitly attractive to large companies.

iOS 9.3, unveiled earlier this year, also adds more enterprise-ready features, and new capabilities for the classroom. Apple has been losing a war with Google over the kind of devices schoolchildren use. Chromebooks, which run Google’s set of web services, have become increasingly popular – to the cost of Apple’s alternatives. The new software includes support for a ‘Teacher Mode’ (essentially a dashboard for the classroom) as well as multi-user support and additional security features.

Will businesses bite?

A truly portable computer

And so this is where the 9.7-inch iPad Pro fits in. Just as with laptops, people often have a preference for size that is unique to their work. Maybe they work on the train a lot or find themselves out-and-about and don’t want to shift a heavy computer. For these sort of use cases, even the 12.9-inch iPad Pro may be too much. During the unveiling, Apple made a big deal out of the new Pro’s weight – under a pound for the Wi-Fi model – signalling that this is, finally, a truly portable computer.

The new iPad Pro is a much lighter and more portable device

The company also touted the one million iPad-ready apps that are now in the App Store, all of which can provide an experience that is similar – in broad strokes, at least – to using a full-screen app on a laptop. The addition of split-screen multitasking also shows that the iPad Pro is a computer, not a tablet, and the 9.7-inch model is just a more portable version.

However, it’s still unclear if the intended market – businesses – will bite. Microsoft has been having some success lately with its Surface tablet thanks to Windows 10 and distribution deals with Dell and HP that get the tablet-laptop hybrid into the hands of workers.

Selling to enterprise customers is not like selling to consumers. Everything must be checked, double-checked, then triple-checked and the process can take a very long time. Luckily for Microsoft, it has a lot of experience with this as many, many businesses use Windows and obsess over new versions. Unfortunately for Apple, it does not have a lot of experience in this area.

The iPhone has made a big impact on businesses thanks to employees pushing for it

Smart move

That’s not to say that the new iPad Pro will be a failure. People love Apple products, which is part of the reason that Apple can even contemplate selling to businesses at all. The iPhone has made its way into the hands of employees who have collectively insisted that it become the standard phone in many companies. They are used to iOS and already use a ton of iOS apps that help them day-to-day.

Introducing a smaller, premium iPad is a smart move by Apple and, ultimately, could work as a Hail Mary. The iPhone business still drives the majority of Apple’s profits, giving the iPad some headroom to figure out what, exactly, it wants to be and who will use it.

Phil Schiller, Apple’s head of marketing, may think that it’s “sad” that people still use PCs that are over five-years-old, but that’s just the reality of the market and plenty of people are happy with an iPad from 2010 or 2011. In a few years, maybe they will upgrade, but that’s far from a certainty and moving away from this market and into a more high-growth (and predictable replacement) market such as the business arena is wise.

Source: techradar.com

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