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Apple Makes Play for Even Higher-End Tablet Niche

Apple Makes Play for Even Higher-End Tablet Niche

"Windows 8 singled the destruction of the walls between tablet and laptop, though RT has confused more than enabled that transition," said Argus Insights CEO John Feland. "The 128-GB iPad could be a nod that Apple will soon commit to the same integrated user experience across phone, tablet and computers, but learning from Microsoft's early test of the waters."

By Rachelle Dragani MacNewsWorld ECT News Network
01/30/13 5:00 AM PT

Apple revealed a new version of its iPad Tuesday, a 128-GB version that comes with twice the storage capacity of its previous high-end tablet.

The newest iPad is still under the fourth-generation iPad umbrella, and will have the same features as its predecessors, including a 9.7-inch Retina Display, an HD camera and an A6X chip. It differs in storage capacity, though.

The doubled storage capacity could be beneficial to enterprise users looking to work with more data in a mobile device. It could also be a boon to artists and other users in creative fields, such as film and music editing, who require additional capacity and enhanced display to do their best work.

That extra space will cost users. A WiFi-only version of the new tablet will sell for US$799, and the version with a cellular wireless plan will be $929. The tablets will be available on Feb. 5.

Apple did not respond to our request to comment for this story.

Hello, Businesses

The enhanced iPad represents an overall push by Apple toward a set of consumers increasingly using mobile devices for uses other than browsing the Web, reading an e-book, or streaming a movie. Apple understands there is a growing market of tech-savvy consumers looking for a tablet with something extra, said John Feland, CEO and founder of Argus Insights.

"Consumers are using their tablets increasingly as canvases of creativity, taking photos of eBay treasures, making movies of family moments, sketching site plans for dream homes," he told MacNewsWorld. "Larger capacity, plus hints at multi-user accounts already available on Windows 8 tablets, make the iPad even more suited for shared environments at work or at home."

The price point might run closer to what someone probably expects to spend on a PC, Feland acknowledged, but some consumers would rather forgo a bulky laptop for a sleeker tablet from an established, user-friendly brand.

"Priced at a level close enough to a MacBook Air to make you think twice [whether] to buy a tablet or laptop, the new iPad also leverages a key learning we've seen from the early Windows 8 hybrid devices," he observed.

"Though consumers want to get work done on tablets, they still segment usage by form factor and are confused a bit by hybrids," said Feland. "Even though it's priced close to the Air, consumers looking for a tablet will gladly trade high storage for a keyboard."

That gives the product launch a lot of potential for Apple. The company will still offer its lower-capacity iPads for consumers looking for a simpler tablet. With Windows 8 tablets slowly making their way into the enterprise tablet market, though, Apple is smart to make sure it has its own offerings for that crowd, Feland maintained.

Losing Leverage?

News this week from some of the major wireless providers that carry Apple's iPhone suggests that cellphone carriers are rethinking their relationships with Apple. T-Mobile, the fourth-largest U.S. carrier, announced in December that it would stop subsidizing smartphones. Customers will pay for the phone in full up front or through a payment plan.

"Carriers have always had a love-hate relationship with Apple,"Anindya Ghose, associate professor at the NYU Stern School of Business, told MacNewsWorld. "Because of the subsidies, on one hand, the cost of adding an iPhone customer is about 40 percent higher than the cost for the average non-iPhone consumer. On the other hand, taking a long-run perspective, the average monthly revenue per customer of an iPhone user has been increasing steadily over the past two years between 5 and 10 percent, which is good news for the carriers."

As the smartphone market becomes more saturated with viable iPhone competitors, though, Apple's ability to point to the increased average revenue from iPhone users is waning, Ghose pointed out.

"The iPhone has been so popular with customers that it has traditionally been putting Apple in the driver's seat during negotiations with carriers," he noted. "However, the iPhone has a new and very powerful rival in town. With the imminent and eagerly awaited release of the Samsung Galaxy 4, Apple is no longer going to be able to command similar bargaining power with the carriers."

Going forward, then, iPhone users might be signing different contracts the next time they buy a plan, said Ramon Llamas,senior research analyst with IDC Mobile Devices Technology and Trends.

"The market is ready for more creative ways of structuring plans and subsidies," Llamas told MacNewsWorld. "For instance, people might be open to small monthly fees for the phone but traded for lower monthly plan rates. The time is right to re-examine what people are really paying for and what carriers can really afford to offer."


Rachelle Dragani is a freelance reporter based in Brooklyn, NY. She enjoys staying on top of e-commerce deals, reporting on what new gadget is coming your way, and keeping tabs on anyone trying to hack into your info. Feel free to e-mail her at rachelle.dragani@newsroom.ectnews.com.


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