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As Tablet Growth Slows, What's Apple Inc.'s Next Move?

Chris Neiger
February 1, 2014

The worldwide tablet market had one of its best quarters to date, with 76.9 million tablets shipped in the fourth quarter, up 28% year over year. But despite the uptick, the latest report from International Data Corporation points to a seriously slowing tablet market. But there's opportunity for Apple (NASDAQ: AAPL) in the shifting tablet trend -- and it involves bringing an iPad Pro to market.

The case for a professional tablet
There's no doubt Apple had a great calendar Q4, with worldwide sales of 26 million iPads, up from 22.9 million year over year. But as IDC pointed out, its year over year growth was "well below the industry average." Part of this is due to markets like the U.S. experiencing tablet saturation.

IDC's tablet research director, Tom Mainelli, wrote in a recent report, "We expect commercial purchases of tablets to continue to accelerate in mature markets, but softness in the consumer segment -- brought about by high penetration rates and increased competition for the consumer dollar -- point to a more challenging environment for tablets in 2014 and beyond."

Within that statement is one of Apple's biggest tablet opportunities: diving further into the commercial market.

There's been a lot of talk recently around a possible iPad Pro coming to market later this year. Back in July, The Wall Street Journal reported that a 12.9-inch tablet was being tested, and other sources since then have said a larger iPad may see a 2014 release. Given how Apple's competitors are already in the space, it seems a likely move for the company.

At the beginning of January, Samsung (NASDAQOTH: SSNLF) introduced Pro versions of its Galaxy Tab and Galaxy Note. The largest of the TabPro and NotePro measure 12.2-inches, include a multipane view to switch between opened apps, and Samsung is selling Bluetooth keyboards and mice for the devices. While Samsung may be testing the professional tablet waters, it's certainly not the first one to wade in.

Microsoft (NASDAQ: MSFT) has had a professional tablet ever since it launched the Surface Pro tablet early last year. Though the Surface Pro didn't get off to a great start, the latest quarterly earnings report showed that total Surface units and revenue both doubled sequentially. Though Microsoft's Surface Pro is notably smaller