Apple (NASDAQ:AAPL) flexed its tablet PC muscles with the unveiling Wednesday of the iPad2, although the device isn’t dramatically different than the first iteration that came out last April.
As early rumors had predicted, the new tablet includes rear- and front-facing cameras to support Apple’s popular FaceTime video chat application. It’s also markedly thinner and lighter than the original iPad, and runs on a faster processor — twice as fast, in fact, with graphics performance that Apple claims is 9 times better than in the original, while still retaining a 10-hour battery life.
Investors wondering whether this new tablet will reaffirm Apple’s status as the undisputed market leader in 2011 will have to keep wondering. This upgrade is a stepping stone, similar to Amazon.com’s (NASDAQ:AMZN) second-generation Kindle e-reader or even the iPhone 3G — portables that streamline existing popular technology to secure market share in anticipation of a superior product release that will shortly follow.
Apple’s successor to the iPhone 3G, the iPhone 3GS, is a good signpost — the company will likely release an a second, superior version of the iPad 2 or even an iPad 3 as early this fall.
For now, the support of both Verizon (NYSE:VZ) and AT&T’s (NYSE:T) 3G networks in the iPad 2 will help keep Apple’s tablet sales brisk while competitors like Motorola’s (NYSE:MMI) Xoom and the Research In Motion’s (NASDAQ:RIMM) PlayBook find their audiences.
However, the big question yet to be answered is not which tablet will “win” by the end of the year, but whether tablets themselves will remain popular in their current form.
Motorola CEO Sanjay Jha issued a note via the company’s investor relations website on Monday announcing that his company’s high-end smartphones will ship with Webtop apps and docks by the second half of 2011, meaning they’ll have the ability to connect to laptops and desktop shells to run that computer.
Motorola’s only Webtop product at the moment is its Atrix smartphone that was released Feb. 22 on AT&T. A high-end phone running on Google’s (NASDAQ:GOOG) Android software, the Atrix’s real selling point is its ability to work as a highly portable PC. Motorola sells a series of docks that convert the touch screen handheld into a laptop computer complete with monitor, keyboard, and trackpad.
The truth of the tablet market right now is that consumers and business clients alike are buying one in addition to their smartphones. It’s questionable how sustainable those markets will be side by side. While Motorola is betting big on the tablet market itself, pitting the expensive Xoom head-to-head with the new iPad 2. Webdock-enabled Motorola smartphones, and similar devices that work as both phone and portable PC, may end disrupting the tablet market before it’s permanently established.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here.
