"The MacBook Air hasn't had a major upgrade since early 2015 (the RAM was upgraded to 8GB across models in early 2016) and it's still sporting the same physical design dating back to 2010," Warren writes.
As she frames it, Apple won't choke off the Air entirely, but she questions whether Apple will find it worth investing in a refresh. Her conclusion: the iPad Pro is the new MacBook Air.
"Plenty of apps on the iPad are remarkably full featured and the time when you couldn't do real work on an iPad has long since passed. Plenty of professionals use the iPad Pro as their primary machine," Warren writes.
Tough market for a tablet lover
We'll need a lot more research to know whether the iPad Pro can become a laptop substitute in the spirit of Microsoft's (NASDAQ:MSFT) Surface Pro. But Warren's thesis comes at an interesting time.
Apple's iPad unit sales fell 19% year over year in the first quarter and were down 23% over the first six months of the fiscal year. Sales by dollar volume were down 19% and 20%, respectively, over the same periods. Positioning the more expensive iPad Pro as a solid entry-level business machine -- one capable of standing in for the Air -- could help boost profits in a key product line.
In the meantime, Windows tablets such as the Surface have their share of fans in the enterprise. The company's tablet revenue improved 55.7% to $1.11 billion in the most recent quarterly report. Apple's declines over the same period suggest that Apple has some work to do to beef up its tablet line, and the Pro seems like a likely recipient of planned improvements.
Finally, there's the Chromebook to consider. Recently Alphabet released a new version of the Chrome OS that natively supports installing and using any of the more than 1 million Android apps available in the Google Play Store. The resulting combination could make Chromebooks the most versatile business machines available on the market, at a price far lower than Macs, PCs, or most souped-up tablets.
Time for an iMakeover?
Obviously we can't know what Apple will do to combat its rivals' market moves. CEO Tim Cook could simply decide to do nothing. The Air is a fine machine, after all, and has done quite well since its debut.
Even so, as Warren notes, usage habits are changing, and competitors are factoring that into their newest designs. Maybe it's time Apple did the same.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Tim Beyers owns shares of Alphabet (A and C shares) and Apple. The Motley Fool owns shares of and recommends Alphabet (A and C shares) and Apple. The Motley Fool owns shares of Microsoft and has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple.
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