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The case for an iPad Pro

If Apple faces declining tablet sales, it will go upmarket and introduce a pricier iPad for business and professionals, argues analyst

January 3, 2014 01:00 PM ET

Computerworld - Apple will move upmarket to an iPad Pro tablet, perhaps this year, as it faces pressure from Android device makers searching for profits, an analyst said today.

"iPad Pro" is the label some have stuck on the rumored release of a new tablet, potentially one with a screen larger than the current iPad Air's 9.7-in., and perhaps with a keyboard-cover accessory akin to those Microsoft sells for its Surface line of 2-in-1s.

The term has stuck because of the naming of the iPad Air, and the similar convention Apple uses to differentiate its MacBook Air and MacBook Pro laptop lines.

Sameer Singh, an independent analyst who covers technology on his Tech-Thoughts website, speculated that Apple will launch an iPad Pro aimed at businesses.

He based that assumption on the rapid increase in sales of Android tablets to users he categorized as "low-end consumers" and "mid-range consumers," groups where price is important if not paramount. Apple has been successful in other pools of buyers, "high-end consumers" and "enterprise," said Singh, because of its decision to not compete on price with lower-cost Android tablets.

As evidence, Singh pointed to the pricing of the 7.9-in iPad Mini, which cost $329 and up in its first iteration -- reduced to $299 last October -- and $399 and up in its current Retina display-equipped configuration.

Those prices are higher than similar-sized tablets running Android from multi-national brands, such as Samsung, Google and Amazon, which sell their respective Galaxy Tab 3, Nexus 7 and Amazon Fire HD tables for $299, $229 and $184.

But as those vendors -- especially Samsung, which cannot sell its tablets at or below cost as can Google and Amazon -- are pushed out of the lower-margin markets by cutthroat competitors willing to accept even less profit, they will head toward the high-end consumer space, predicted Singh.

"This is inevitable because branded vendors are facing increasing margin pressures from regional brands and white box competitors in mid-market tiers," Singh wrote on Tech-Thoughts Thursday.

Because Apple declines to go downmarket, its only choice is to go upmarket to even pricier tablets aimed at buyers with deeper pockets.

It would make the move to an iPad Pro if sales of its current lineup began to stagnate or fall, Singh said.

"In the past, Apple has had to deal with falling market share," he said in an email reply to questions today, adding that it has been sanguine about its shrinking share of tablet sales. "But it has never faced the threat of declining sales, at least in the mobile era. So, if Apple [does] face a decline, my bet is that it will choose to go upmarket rather than cut prices and attempt to move down."



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