All eyes are on the new Apple Inc. (NASDAQ: AAPL) iPhone 4 this week as it joins the network of Verizon (NYSE: VZ), but the California company already has its eyes set on its next big release for 2011: The iPad 2.
With nearly 15 million debut models of the iPad tablet computer sold, industry analysts and investors alike are anxiously awaiting the second generation iPad. Hints about iPad 2 features have ranged from the mundane to the ludicrously high tech. Tablet cases shown off by third party accessory makers at the Consumer Electronics Show in January included slots for forward- and rear-facing cameras as well as a larger speaker at its base. Other rumors that the iPad 2 would feature a “Retina Display” screen with a 2048 X 1536 pixel resolution (four times that of the iPad’s screen) have been debunked, with pundits like Daring Fireball’s John Gruber saying those rumors were simply “too good to be true.”
Regardless of what’s inside the tablet, it is definitely coming. The Wall Street Journal reported on Tuesday that, according to sources familiar with the matter, Apple has already started manufacturing the iPad 2. The report claims that the second generation tablet will include improved memory and a more muscular graphics processor in addition to the aforementioned cameras. Verizon (NYSE: VZ) and AT&T (NYSE: T) will support the tablet when it’s released — Sprint (NYSE: S) and T-Mobile USA will apparently be left out in the cold yet again — but the report doesn’t specify whether the tablet will be built for those carriers’ CDMA and GSM 3G networks or come in a single model suited for their respective 4G LTE networks.
Unlike its predecessor, the iPad 2 will be releasing into a more competitive field, especially on Verizon’s network. This spring will see a number of tablets built on Google (NASDAQ: GOOG) Android 3.0, nicknamed Honeycomb, a version of the increasingly popular mobile operating system made specifically for tablet implementation. The flagship device,a Motorola (NYSE: MMI) XOOM, will be exclusively available on Verizon’s network when it releases this spring, reportedly ahead of the second generation iPad’s debut. Research in Motion (NASDAQ: RIMM) will also be delivering its BlackBerry PlayBook tablet in the same timeframe.
Apple won’t be facing down its most recent competitors from the mobile market this spring either. A tablet PC made by a pairing of the company’s oldest rivals is also due out in time to take on the iPad 2. According to a CNET report, Dell (NASDAQ: DELL) unveiled a 10-inch tablet running Microsoft (NASDAQ: MSFT) Windows 7 operating system at its Dell Means Business event in San Francisco on Tuesday. Specifications for the 10-inch Windows tablet were not disclosed, but Dell VP Steven Lalla said that his company was going with Microsoft’s OS because the majority business clients want it. Dell will also be making a version of the tablet with Android, but the Windows tablet is the star of the show.
The question that will define 2011 then is just how much has Apple changed the PC market? With companies already shifting away from traditional solutions like BlackBerry in favor of Apple and Android devices for their smartphone needs, will they follow suit with tablets? Is Dell chasing a dead market by emphasizing a Windows 7 tablet over competing operating systems? Are PC manufacturers too late to take on the mobile device makers like Motorola that are bringing their wares to market faster?
With Microsoft’s tablet-ready version of Windows—announced at CES—still at least a year way, investors shouldn’t peg Dell as the company to bring the fiercest challenge to the iPad 2 this spring. If nothing else, the Dell Windows tablet will be one more marker of the broader shift in power in the home computing industry.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here.
