Can the iPad Air 2 Bring Apple, Inc.'s Tablet Business Back?

iPad Air. Source: Apple.

With all the excitement in the air for Apple's (NASDAQ: AAPL  ) upcoming iPhone 6, what about the iPad Air? Or rather, the next iteration of Apple's flagship tablet, which many are already casually referring to as the "iPad Air 2." Let's look at what the Mac maker could have in store for its tablet business this fall.

What to expect when you're expecting iPad Air 2
As far as the device itself goes, Apple will likely use a similar design as the current iPad Air. The company hasn't quite implemented the same tick-tock model that it uses in the iPhone, but recent leaks do suggest that the newer model will only have minor physical differences.

The most likely headline selling features of the iPad Air 2 will be the addition of Touch ID and a newer A8 processor with improved graphics capabilities. Other incremental upgrades could include a layer of anti-reflective coating for better outdoor use.

Apple usually launches iPads at a separate October event, after hosting an iPhone event in September. In that way, Apple gets to rain on the parade of all of its competitors that hope to have major product announcements during those two months.

Don't forget about the iPad Mini 3
The iPad Mini 3 will likely get the same features as the iPad Air 2, namely Touch ID and the A8 processor. There haven't been any leaks suggesting that the iPad Mini is getting an industrial redesign, further confirming the lack of a tick-tock model for iPad designs.

The more important consideration will be whether or not Apple keeps the first-generation iPad Mini around in order to address an even lower price point. It will almost undoubtedly waterfall the second-generation model down to the $300 price point.

Apple could choose to continue selling the first-generation model at a lower price to put competitive pressure on rivals and effectively moving downmarket. As of right now, a price umbrella exists at $300, and Tim Cook is acutely aware of the strategic implications of price umbrellas.

However, discontinuing the first-generation model would allow Apple to finally eliminate non-Retina resolutions from iOS, simplifying the development process for app developers while simultaneously streamlining its supply chain since it would no longer need 7.9-inch non-Retina display panels. Apple has always resisted competing on price, so it will likely just discontinue the first-generation model.

Just what the tablet market needs
To be clear, iPad results have been a relative soft spot recently. There's not much sugar coating you can do other than chalk some of the differences up to changes in channel inventory. That's been Tim Cook's explanation for the year-over-year declines that the company has posted for the past two quarters. That's not to say that Apple's tablet business is faring poorly right now, but just that it is starting to show signs of deceleration.

While I'm a firm believer that the broader tablet market is merely taking a breather after growing so quickly for the past few years, and that it will soon resume its upward trajectory with Apple benefiting along the way, a catalyst in the form of a new product launch could help reinvigorate Apple's iPad sales as well as the overall market. Hopefully, the iPad Air 2 and iPad Mini 3 will be just what the market needs.

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  • Report this Comment On August 23, 2014, at 12:23 PM, Mathman6577 wrote:

    The product itself won't necessarily bring back the "market". The market for small tablets is declining because of the proliferation of bigger phones. And since margins are higher for the iPhone, which is expected to get bigger, this might be a good thing for Apple.

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