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Apple Offers iPad for Conspicuous Consumption

By Peter Suciu MacNewsWorld ECT News Network
Jan 29, 2013 4:05 PM PT

Apple announced a 128-GB version of the fourth-generation iPad with Retina Display on Tuesday. This latest version of Apple's popular tablet computer, which doubles the capacity of the previous top-end model, is now available with WiFi as well as WiFi-plus-4G service.

Apple Offers iPad for Conspicuous Consumption

While Apple has been pushing its products further into the cloud, the new iPad seems to be targeting more down-to-earth usage.

"It's not about running programs -- it's about storing stuff," said Roger L. Kay, principal analyst at Endpoint Technologies Associates. "The cloud can take care of much of the storage need, but people still like to keep things local."

Apple did not respond to our request for further details.

Carving Out a New Niche

The new 128-GB version, when it becomes available early next month, won't come cheap. It will be priced at just under US$800 for the WiFi-only version and almost $930 for the cellular version.

"The price tag could be somewhat of a problem, since the tablet market is getting more competitive," Kay told MacNewsWorld. "Normally, one would expect to see price drops in the face of competition."

By increasing the cost on the highest-end model, Apple could help pad profits in the category. Given that the company has seen its overall value fall after its recent earnings report, Apple likely doesn't want to face pricing pressures that could erode its margins..

"It is ironic that Apple is moving to 128 GB while Android tablet makers are looking at 8 GB to present more affordable options," said Rhoda Alexander, senior manager for monitors and tablets at IHS iSuppli, "but Apple's move has the potential to slow or even reverse that price slide in the category."

"At the same time, it expands the total price range of tablets,"Alexander told MacNewsWorld. "The new 128-GB iPad is going to be a niche portion of the market. But every shift can help."

Greater Media Consumption

Since its 2010 debut, Apple's iPad has been viewed as a product more for content consumption than creation. It will be interesting to see if that perception changes with the new 128-GB version, since it can store more content locally.

"This underscores the fact that the iPad is primarily a device for multimedia consumption, and that as media including photos, video, music and film becomes richer, they tend to require more storage," said Charles King, principal analyst at Pund-IT.

"When the iPad was originally launched, its 16-, 32- and 64-GB capacity options were fairly reasonable, though it should be remembered that Apple was criticized for not including a USB or SD card port so users could easily add storage if they chose. Today, adding a 128-GB option seems eminently reasonable," King told MacNewsWorld.

"For the media users, HD movies can take up a lot of space," said iSuppli's Alexander, "but this could also make it an easier choice to go with the WiFi-only option instead of 4G. With this much storage, you don't have to depend on the cloud."

Taking a Bite Out of MacBook Sales?

Is Apple carving into its own laptop market by offering up such an expensive tablet?

"Whether this will impact MacBook sales is the most interesting issue," said King. "Since its beginning, iPad sales benefited from the device's modest cost compared to laptops. At nearly $800 for the new 128-GB version, the iPad is nosing into MacBook and Ultrabook territory -- both platforms that don't suffer the iPad's inherent performance limitations and offer considerably greater and more flexible options, including memory, storage and the ability to run full performance applications."

There is also the question of whether the 128-GB iPad is targeting a new customer demographic.

"While other tablet makers are looking at consumers, Apple has been reaching out to business users," said Alexander. "This is a continued direction that Apple has gone after with the iPad since its launch."

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