While Apple (AAPL) watchers and consumers are eagerly anticipating the expected unveiling of the new Apple iPad lineup in the fall — the refreshed iPad Air and iPad Mini — there’s another date that may be even more important. According to a Bloomberg report that has been picked up by Techcrunch’s Darrell Etherington and others, AAPL is planning to introduce a brand new Apple iPad model in 2015, a 12.9-inch tablet that dwarfs the iPad Air.
A year ago, the idea of a super-sized, more expensive iPad would have seemed crazy, but AAPL investors should be happy that this bigger new Apple iPad is on its way.
Apple iPad Marketshare is Declining
Only four years ago, Apple owned the tablet market. But smaller, cheaper tablets running Google’s (GOOG) Android operating system quickly gained ground. AAPL was slow to recognize the shift, dismissing the Amazon (AMZN) Kindle Fire and others until it was finally forced to react with the iPad Mini.
But the new Apple iPad was late to the game, and the damage was done. While it remains the biggest tablet manufacturer, iOS has been eclipsed by those Android tablets in marketshare. Making things worse, bigger smartphones — the phablets popularized by Samsung (SSNLF) — are eating into consumer demand for tablets.
The situation may not be as dire as Businessweek’s Jim Edwards proclaimed in May, when he wrote that Apple’s iPad business was “collapsing,” but the iPad is a big part of Apple’s bottom line, and the sliding marketshare (currently around 27%) is cause for concern.
A new Apple iPad Air is going to do little to turn that situation around.
New Apple iPad: Big is the New Small
There has been a move among other tablet makers to try to boost their sales (and profit margins) by avoiding direct competition with the iPad Air and instead trying to attract users with bigger, premium offerings.
There’s a trend building toward going big, and rather than be left behind as it was when tablets went small, AAPL looks to be jumping in sooner rather than later. The new Apple iPad expected in early 2015 is pegged at 12.9-inches.
New Apple iPad: Ready for Enterprise and Professional Users
Most consumers seem happy with 7-inch and 10-inch tablets. New versions of the Apple iPad Mini and iPad Air will help AAPL remain a leader with this core group.
But with the consumer tablet market becoming saturated and facing pressure from phablets, the real opportunity for growth is in the professional and enterprise market. These users need a bigger screen to display more information if a tablet is going to replace the laptop they already use.
A bigger tablet like the new Apple iPad would satisfy the needs of this market, and even if it’s bigger and more expensive than the iPad Air, it would still be lighter than a notebook PC and likely cheaper too. AAPL’s recent partnership with IBM (IBM) to help it move more tablets to these customers will receive a real boost with the availability of a big Apple iPad to sell.
Expect Apple to move plenty of the new iPads in consumer channels too, at least during the initial quarters after introduction. AAPL has a lot of hardcore users who may not have replaced their iPads for updated versions of the same thing, but will happily shell out for a brand new iPad model. They may not need a 12.9-inch display, but they’ll buy one anyway.
After the iPhone, iPads are AAPL’s second-biggest business. With so much at stake, the current state of stagnant growth is not something the company is going to take sitting down. The revised iPad Air and Mini set to debut this fall should help to spur holiday sales — as they always do — but it’s the big new Apple iPad destined for the professional and enterprise market that offers the best chance for AAPL to regain some of its tablet glory.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.