Apple expands its iPad range with new models

However, analysts warn company’s stranglehold on tablet market will continue to loosen

Apple unveiled the latest additions to its market-leading iPad device range last month – but its grip on the tablet space will continue to loosen, analysts were quick
to warn.

As with the launch of the iPhone 5c and 5s in September,   Apple unveiled two new models during the event in San Francisco which included the fifth-generation iPad – dubbed the iPad Air – and an upgraded version of the iPad Mini.

The 9.7-inch Retina display iPad Air is 20 per cent thinner and 28 per cent lighter than its predecessor. It will also run on the 64-bit A7 chip which Apple introduced in the iPhone 5s.

The upgraded 7.9-inch iPad Mini will also now feature a Retina display, upping its pixel density from 163 to 326 pixels per inch, and the 64-bit A7 chip. It is 0.3mm thicker than its predecessor and weighs an extra 23g. Both of the new iPads will be preloaded with Apple’s latest iOS 7.

“iPad created an entirely new mobile computing experience, and the new iPad Air is another big leap ahead,” Apple senior vice president of worldwide marketing Phillip Schiller said: “It is so thin, light and powerful, once you hold one in your hand you will understand what a tremendous advancement this is.

“iPad Air with its 9.7-inch Retina display weighs just one pound and packs the incredible performance of iOS 7 running on a 64-bit desktop-class Apple A7 chip, and delivers all-day battery life in the lightest full-sized tablet in the world.”

Price
iPad Air with Wi-Fi models wereavailable in silver or ‘space grey’ from November 1, with the 16GB model costing £399, the 32GB model costing £479, the 64GB model costing £559 and the 128GB version costing £639. iPad Air with Wi-Fi and Cellular models cost £100 more than Wi-Fi-only alternatives.

The iPad Mini with Retina display will be released this month (no exact date had been set at the time of writing) with Wi-Fi models starting at £319 for the 16GB version and increasing incrementally by £80 up to a 128GB model costing £559. iPad Mini with Retina display Wi-Fi and Cellular models will also cost £100 more than Wi-Fi-only alternatives.

Additionally, Apple confirmed that it will retain the iPad 2 and the original iPad Mini in its tablet line-up.

The 16GB iPad 2 with Wi-Fi will be available for £329, with the 3G model costing an additional £100.

Apple will also now offer the original iPad Mini at £249 for the 16GB Wi-Fi model and £349 for the 16GB Wi-Fi + Cellular model.

Network partners
Vodafone, EE and Three have all confirmed they will offer Apple’s new iPad Air tablet with a choice of 3G and 4G contracts from November 1.

Vodafone said it will also stock the iPad Mini with Retina display later in November. Vodafone’s pricing plans had not been announced at the time of going to press.

EE also said it will offer both of the new iPads from launch on its 4GEE network, as well as on Orange and T-Mobile.

Three said it will range the new iPads, and confirmed it would stock the iPad Air at launch.

O2, and Phones 4U did not respond to Mobile News’s requests for information.

Falling share
While Apple remains the out-and-out market leader, having pioneered the space in 2010 (170 million sales, 39 per cent market share) its global market share has been on the slide – falling by around 20 per cent in the past year, according to research firm IDC. Samsung, with its Galaxy Tab range, has in contrast seen continued year-on-year growth from around 11 per cent to just under 18 per cent.

Nokia has also entered its name in the growing list of tablet manufacturers with the 10.1-inch Lumia 2520, released in Dubai on the same day as Apple’s conference.

In the UK, Apple remains dominant, and is expected to command around 59 per cent of the total number of smartphone users (11.8 million units) by the end of this year, according to research firm eMarker.

As reflected on a global basis, growth will continue to slow throughout the forecast period and by 2017, that share is expected to have fallen to around 40 per cent (see ‘Industry reaction’ boxouts for analysts’ views).

Financials
However, sales in the quarter ending September (released last week), painted a positive picture, in spite of analysts’ warnings.

Apple increased sales of its iPads during the fourth quarter of 2013 compared to the same period in 2012 – 14.1 million compared to 14 million.

In contrast, sales of its Mac computer sales fell to 4.6 million from 4.9 million in the same quarter last year as the tablet space continues to eat away at PC market share.

iPhone sales continue to show few signs of falling, with the manufacturer breaking all previous Q4 records following the release of its new iPhone devices.

It sold 33.8 million iPhones, a record for the September quarter, compared to 26.9 million in the same quarter last year – a 26 per increase.

However, it reported a nine per cent fall in profits, after profits per device fell from 40 per cent to 37 per cent – plus a mix of lower priced devices (iPhone 4 for example) remaining available.

Net profit for July, August and September was $7.5 billion (£4.7 billion) compared to $8.2 billion (£5.1 billion) for the same period last year.

Revenues rose to $37.5 billion (£23 billion) from $36 billion (£22 billion), although gross margin (the profit per product) fell from 40 per cent to 37
per cent.

CEO Tim Cook said: “We’re pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones.

“We’re excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad Mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next-generation iWork and iLife apps for OS X and iOS.”

CFO Peter Oppenheimer said: “We generated $9.9 billion [£6.2 million] in cash flow from operations and returned an additional $7.8 billion [£4.8 million] in cash to shareholders through dividends and share repurchases, bringing cumulative payments under our capital return programme to $36 billion [£22 billion].”

Full article in Mobile News issue 551 (November 4, 2013).

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