Will An iPad Pro Hurt Intel?

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At Apple's  (NASDAQ: AAPL  ) recent iPhone 5s launch, CEO Tim Cook accused his competitors of being "confused." In fact, Cook went so far as to mock the notion of laptops trying to be tablets as well as the reverse. However, Evercore Partners, which is very bearish on Intel (NASDAQ: INTC  ) , is claiming that Apple is going to do precisely what it mocked Microsoft and the entire PC ecosystem for trying to do.

Apple's MacBook Air is stale...
A look at the PC market shows that there is a very real push toward touch-enabled, differentiated form factors. Some have simply become exceptionally thin and light laptops with touch, but others have become things like sliders, "flip" designs, detachable mechanisms (i.e. tablets with integrated keyboard docks), and so on. While the Apple MacBook Air is a good machine with well-designed internals, and a very nice OS, it isn't "exciting."

What would an iPad Pro accomplish?
While some are betting on Apple to go all-out with next year's redesign of the MacBook Air (which could end up fanless as a result of Intel's very low power Broadwell chip), it seems that others (namely those bearish on Intel) believe that Apple is looking to simply supplant its MacBook Air with an iPad Pro.

Now, it's not too difficult to see this working, particularly as Apple has been very aggressive in bridging iOS and MacOS (although it has been happening in a much subtler, iterative way than what Microsoft tried to do with Windows 8/8.1). iOS has a very rich ecosystem and with enough work and a thoughtful design, an iPad Pro could very well be a viable "convertible" device that could replace the MacBook Air.

Just one little problem, though
It seems like "doom and gloom" for Intel here, but it may not be as clear-cut as you might think. First off, it seems very unlikely that Apple's next-generation A8 system-on-chip will have the CPU and graphics performance that the Haswell processor inside the current MacBook Air currently has, let alone what Intel has in store with 2014's Broadwell.

If such an iPad Pro were to be released in a bid to outright replace the MacBook Air, it would suffer a performance regression from the product that it replaces. Further, while Apple has been aggressive in unifying the software ecosystems, there are still plenty of applications on MacOS that would need to be ported over. Apple can do it, but it seems like a lot of unnecessary hassle.

If Apple does indeed go ahead with the iPad Pro, there is little doubt that for some users, it would replace a MacBook Air. However, for users who need speed (CPU speed, faster/more robust storage, etc.) or simply a more traditional clamshell form factor, the MacBook Air -- particularly one with an updated industrial design and Intel's upcoming Broadwell processor -- will still be the device of choice.

Foolish bottom line
If the rumors are true, it will be interesting to see Apple expand its product lineup to include a larger tablet. Further, while Intel may seem like the big "loser" here, it is unlikely that Apple will cease to develop and iterate its MacBook Air/Pro line of products. Could an iPad Pro serve to cannibalize MacBook Air sales? It seems likely to some extent, although the degree to which it does depends on how Apple positions it.

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  • Report this Comment On January 06, 2014, at 12:26 PM, twolf2919 wrote:

    1. There have been plenty of rumors of a larger-screen iPad, some sources being in Apple's supply chain. There have not been any substantive rumors that such a device would a "hybrid". So calling out Tim Cook for hypocricy, even if done in an oblique way,is a bit premature, wouldn't you say? Besides, what would be the point of such a hybrid? iPads already support wireless bluetooth keyboards - Apple even sells one - so if someone needs to do serious data entry, they already have a solution. For those who need to do this often while traveling, the MBA already provides a solution.

    2. Your point about the market going into a touch-enabled direction is not really substantiated by numbers. The only touch-enabled devices that have garnered any real support from consumers are smartphones and tablets. Touch enabled laptops may exist, but nobody is buying them in any real numbers - so why should Apple step into such a low-volume market? From what I can tell, others are developing these "differentiated form factors" not so much because it's what an overwhelming number of people re demanding, but to DIFFERENTIATE themselves - in the apparent hope that this will raise sales.

    3. The MacBook Air is not "stale". It is the overall desktop/laptop markets that are "stale". Apple doesn't need to ape others' every desperation moves to reinvigorate sales. Apple's laptops have and can continue to simply take market share from the others by simply continuing to refine their laptop designs. There is no need - at least not yet - to cannibalize MBA sales by inventing an unnecessary new hybrid product line.

  • Report this Comment On January 06, 2014, at 4:10 PM, jimbeama wrote:

    Without touch Windows 8+ is much less easy to use. I was mildly shocked they came out with Windows 8 prior to touch being standard on all Win8 machines.

    In a very unscientific study conducted at a Best Buy in Santa Cruz, CA I found that all of the Windows devices I looked at were touch enabled: 2:1, all-in-ones, tablets, laptops.

    I read somewhere recently that the plan is to have 100% touch enabled this year.

    Personally I really want touch on my laptop. I don't know why you wouldn't.

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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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