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Apple, Inc.'s New iPad Air -- What to Expect

By Daniel Sparks – Feb 14, 2016 at 10:25AM

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In about one month, Apple will likely reveal its newest iPad -- and the device is getting a significant overhaul.

On Friday, 9to5Mac's Mark Gurman was served yet another scoop on Apple's (AAPL -1.96%) rumored upcoming event. He had previously received word from some unnamed sources that the company would hold an event to launch a new smaller iPhone to replace the iPhone 5s, an iPad Air 3, and new bands for the Apple Watch, on March 15. And now he's reporting that Apple will begin selling these devices online and in stores just three days after the event. Considering his reliable track record with Apple rumors, chances are his prediction will pan out. But Gurman did note that his sources "cautioned that the plans could still change."

iPad Air 2. Image source: Apple.

After reviewing in a recent article what there is to expect from Apple's rumored mid-cycle update to its 4-inch iPhone 5s with a new 4-inch iPhone, I'm now going to take a look at what there is to know about the company's rumored iPad Air 3 -- and why it matters for Apple.

iPad Air 3
Here's a roundup of the rumors about the potential key updates to Apple's iPad Air 3.

  • The iPad Air 3 will take design cues from Apple's iPad Pro.
  • One iPad Pro feature the iPad Air 3 will adopt is a Smart Connector, or Apple's new interface for connecting an iPad-compatible keyboard to the tablet.
  • Another key iPad Pro feature rumored to come to the iPad Air 3 is support for Apple Pencil.
  • The new tablet is expected to sport Apple's A9 processor, which was first introduced with the iPhone 6s and 6s Plus.
  • The iPad's camera will likely get an update, potentially including a rear LED Flash.
  • The iPad Air 3 may sport an upgraded four-speaker stereo sound system like the one built into the iPad Pro.

iPad Pro four-speaker audio system. Image source: Apple.

Keep in mind that these are all rumors. And even if Apple did intend to include any of these features in the iPad Air 3 at one point in the past, the company's plans could have changed closer to launch.

But Gurman does confirm that his sources say an iPad Air 3 will likely be one of the products announced at Apple's March 15 event.

Why it matters
Apple's iPad update is particularly important for the company because Apple's iPad segment has been on the decline. Indeed, iPad sales have essentially been declining on a year-over-year basis for almost two years. And highlighting the continuing challenging environment for iPad, the segment's revenue was down 21% compared to the year-ago quarter in Q1 and unit sales were down 25%.

With over 60% of Apple's revenue coming from iPhones, it's easy to judge Apple's iPad segment as unimportant. But representing about 9% of the company's revenue in Apple's most recent quarter, the segment is certainly still meaningful to Apple's overall business. Indeed, Apple's iPad segment was its second-largest source of revenue in the company's first fiscal quarter of 2016, generating $7 billion in revenue -- ahead of Mac revenue at $6.7 billion and Services revenue at $6.1 billion.

Given the overall negative momentum in the segment, it's unlikely that even a significant update to Apple's iPad segment will reinvigorate growth. But the iPad Air 3 could help to moderate a decline in the business and maybe even help Apple begin to hold sales in the segment steady throughout the year.

Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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