Is Apple's Tim Cook Changing His Mind?

Apple (NASDAQ: AAPL  ) CEO Tim Cook has, on many occasions, attacked Microsoft's (NASDAQ: MSFT  ) Windows 8 strategy. With Windows 8, Microsoft created a hybrid operating system -- one that could adequately power both a tablets and traditional PCs -- which Cook has criticized repeatedly.

But reports have indicated that Apple could be about to do the same. Apple is said to be working on a larger, 12-inch iPad, one that could come with a keyboard and double as a sort of hybrid device. If Apple takes that step, it would suggest that Microsoft, despite failing with the Surface, is on to something. It could also weigh on chipmaker Intel (NASDAQ: INTC  ) .

Microsoft is confused
Although he's never referred to Microsoft directly, Cook has made a steady stream of statements critical of Microsoft's current operating system. Last year, he remarked that any two devices could, in theory, be combined, though it doesn't always make sense to do so. A toaster/refrigerator combo is possible, for example, but not likely to please users.

Then, when Cook unveiled the iPad Air, he said Apple's competitors (read: Microsoft) were "confused," making tablets into PCs and PCs into tablets -- a clear reference to Microsoft's decision to give Windows 8 dual-interface functionality.

And so far, Cook has been right. There's been a fair amount of backlash to Windows 8 among consumers, while sales of Microsoft's own Surface tablets have been lackluster -- the company took a $900 million writedown on Surface hardware back in July.

An iPad Pro?
But is Apple about to do the exact same thing? It has a patent on such a device, and analysts at Nomura believe that Apple will unveil an iPad hybrid next year. A report from a Chinese tabloid said Apple is currently testing an iPad with a display around 12 inches, which would be an ideal screen size for a hybrid device.

There are other signs that Apple is gearing up for such a launch. Consider the name of its new iPad, the "iPad Air" -- just like the Macbook Air. Extending that naming convention, an "iPad Pro" seems like next the logical next step.

Also, consider that Apple has started to bundle its Microsoft Office competitor, iWork, with its iOS devices. Without a keyboard, iWork is hard to use, yet it's useful to some iPad owners -- the ones with third-party keyboards. By pushing iWork, Apple obviously understands that there's a market for people who use its iPad like a traditional laptop.

Tablets could take an even bigger bite of the PC market
If Apple does release a hybrid tablet in the form of an iPad Pro, it would, in a sense, validate Microsoft's strategy: Apple would be conceding that there's a market for hybrid devices. That's not to say it would benefit Microsoft -- it would be even more competition for Microsoft's Surface tablets (and other hybrid tablets running Windows 8), but Intel, not Microsoft, would be the company for investors to watch.

Apple's iPad Air contains the A7 processor, the first 64-bit ARM-based mobile chip Apple has used. That extra power is largely superfluous for mobile computing, but it could be useful for traditional PC applications. If Apple releases a hybrid, it will almost assuredly use one of these 64-bit chips, and that's not good for Intel.

Intel has made little headway in the mobile market, as most tablets and smartphones use chips based on its competitor, ARM Holdings, designs. Intel's chairman admitted that the company had "lost its way" earlier this week, and Intel's new CEO has vowed to change that. But, at least for now, Intel remains far behind its competition. Yet Intel retains the majority of the traditional PC market, which has limited its share depreciation.

But an iPad hybrid could cannibalize many sales of traditional PCs. More dangerous would be Apple's Android-based competitors that would surely follow. In short, if Apple's iPad Pro triggers a wave of larger mobile tablets with hybrid laptop functionality, the market for Intel's Ultrabooks could shrink dramatically. However, that isn't to say that all hope would be lost for Intel. Last week, Intel announced that it plans to release chips that can run 64-bit Android next year.

More devices in 2014
Apple's management has promised to release new devices in 2014, and one of those could a hybrid tablet. If Apple does release such a device, it could contradict Cook's stance on hybrids, though Apple has done similar things in the past. Steve Jobs famously criticized small Android tablets -- and then Apple released the iPad Mini.

Hybrid tablets have found little success so far, but if Apple is thinking about entering the market, the hybrid story is far from over.

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  • Report this Comment On November 24, 2013, at 2:59 PM, PragmaTechNerd wrote:

    I don't think that Apple is proposing for the iPad Pro anything that existing users don't already do. I for one use a keyboard case with my iPad to create a hybrid laptop for note-taking, etc in an office environment.

  • Report this Comment On November 24, 2013, at 3:51 PM, CamdenTommy wrote:

    PragmaTechNerd is absolutely correct. In addition I assert that it's far more difficlut to modify a mouse-and-keyboard system for touchscreen operation than vice versa. That's why the ability to enter text into iOS is seamless, while adding touchscreen functionality to Windows 8 has made it a hopeless clumsy kluge. Furthermore, Mr. Mattera, the author of this article, has leapt to the conclusion that Mr. Cook had expressed disapproval of a hybrid device, while in actuality all evidence I've seen indicates that Mr. Cook disapproved not of the hybrid device, but of hybridizing the Windows operating system to support the device. Mr. Cook is also absolutely correct.

  • Report this Comment On November 24, 2013, at 4:24 PM, engguy wrote:

    "If Apple releases a hybrid, it will almost assuredly use one of these 64-bit chips, and that's not good for Intel."

    Maybe if the author understood how computers work he wouldn't be spouting that nonsense. ARM chips are entirely incompatible with 100% of OSX programs, and unlike the upconversion to more general processing in x86, you can't emulate in realtime with ARM.

  • Report this Comment On November 24, 2013, at 6:17 PM, RMacky wrote:

    The idea that a tablet could grow up to replace the functions of a desktop or laptop is very real. However, I doubt that it will resemble the MS Surface when Apple implements such a device.

    If you've used the Apple iWorks programs you will know that the virtual keyboards change with each program. For example, the virtual keyboard for the spreadsheet application suddenly has a 10-key pad and math functions, while the word processing program is tuned for word entry. Both keyboards allow for voice entry.

    Whatever Apple does will move further from a PC, not closer. Whatever Apple does will move closer to custom per application, and further from one keyboard fits all. When projecting what Apple is about to do, you need to think outside the Microsoft box... For example, rather then entering formulae in a spreadsheet, why not just tell it what you want to learn from the data? Or ask it to show you any patterns in the data?

    Computers today are smart enough to do some amazing analysis of numbers and words. Why not let them?

  • Report this Comment On November 24, 2013, at 8:11 PM, PeteH66 wrote:

    Nobody's comments (uniformly pro-Apple as they seem to be) rule out Intel's participation in the next generation(s) of tablet/laptop evolution -- especially when you remember that Intel is 1-1/2 generations ahead of ARM in reducing size, power consumption and heat on silicon chips. Krzanich saying Intel had "lost their way" is a subtler admission than the author knows: the way that was lost (or misplaced) was the way of never assuming their supremacy was assured. It's a reasonable bet that Intel's R&D budget -- about half of ARM's market cap -- is at least as capable of being a game changer as Tim Cook's willingness to imitate the tab/top hybrid. Check here: http://www.fool.com/investing/general/2013/08/09/how-rd-and-....

  • Report this Comment On November 24, 2013, at 8:17 PM, Azzras wrote:

    To many iFans in here for me to comment...

  • Report this Comment On November 24, 2013, at 8:29 PM, fredgehelm wrote:

    The mistake was in making a hybrid OS, not hybrid hardware. iOS will remain iOS and OS X will remain OS X. So a 12" iPad Pro will run an even better version of iOS that makes good use of even better hardware. And no, it won't run OS X apps.

  • Report this Comment On November 24, 2013, at 9:29 PM, VinceKlortho wrote:

    engguy wrote:

    ... and unlike the upconversion to more general processing in x86, you can't emulate in realtime with ARM.

    Emulation in real time is not necessary. The vast majority of apps can be cross-assembled at load time (once and then saved) and will be functional on the target processor. This was done more than twenty years ago on various machines like the DEC Alpha, for one.

  • Report this Comment On November 24, 2013, at 11:07 PM, techy46 wrote:

    "adding touchscreen functionality to Windows 8 has made it a hopeless clumsy kluge" is a dumb and uninformed copy cat statement.

    I've got an Asus T100 10" 2-in-1 W8.1 64Gb notebook tablet at Walmart for $379 that is NOT a kludge. It's a tablet with a modern touchscreen when I'm using it without the keyboard and become a notebook with or without the keyboard when I use the Desktop or included Office 2013.

    Now what may be a kludge is the fact that there are so many idiot Windows users that have never really had a clue how to really use a Windows PC and thus Apple's success. How can anyone possibly give Tim Cook any credit if he copies Microsoft's OS integration which will ultimately be an enormous successful milestone in the industry.

  • Report this Comment On November 25, 2013, at 1:01 AM, Vitabrits wrote:

    The biggest problem and hurdle that turns many off the Surface RT is price. Apple fans are more likely to hunker down ~$1000 for an "iPad Pro" compared to Windows users.

    I still feel it is a niche market for true hybrids but only time will tell.

  • Report this Comment On November 25, 2013, at 1:14 AM, doawithlife wrote:

    A hybrid tablet that uses ARM.

    That's not hybrid.

    Hybrid means it uses X86. The same standard used in a PC or Laptop. ARM is the standard used for mobile devices.

    If they are making a Hybrid device, it will rely on X86 weather that CPU comes from AMD, Intel, or IBM.

  • Report this Comment On November 25, 2013, at 1:18 AM, doawithlife wrote:

    Another way to put it.

    The Surface is not a hybrid device. It is a tablet and it uses the ARM standard.

    The Surface Pro is a hybrid device. It uses the x86 standard.

  • Report this Comment On November 25, 2013, at 4:03 AM, flybywire54 wrote:

    I bought an Asus Vivo touchscreen laptop running on Win8 (upgraded to Win 8.1) and really in some cases like scrolling or zooming through pages on website or emails , I really appreciate the touchscreen capability , makes CERTAIN things much faster then using a mouse ...

    I use Metro also for certain things like entertainment

    What about defining Win 8.1 primarily as a desktop laptop OS (no need to boot in metro) with touchscreen capabilities and WinRT as a purely tablet OS (forget about desktop) ?

    I know that many people here will find all sorts of excuses against having touch screen on a 25" desktop monitor, but for many professional users that have to go through pages of datas or run computer on machinery , touchscreen is faster .

  • Report this Comment On November 25, 2013, at 7:38 AM, jdmeck wrote:

    I don't see the need for it. I have no desire to hold a 12" pad.

  • Report this Comment On November 25, 2013, at 11:32 AM, FREEHIKER wrote:

    Unfortunately, this is one time I must agree with apple. I am one of the poor fools who bought a windows 8 machine. I am getting tired of having to get past these damned APPs to get to what I want. If I had wanted a tablet, I would have bought one. I have an old set of XP discs, and have even thought of dumping this whole system, and going back to that. Even though it will soon be unsupported.

  • Report this Comment On November 25, 2013, at 12:41 PM, auggybendoggy wrote:

    "I am getting tired of having to get past these damned APPs to get to what I want. "

    Huh?

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