Apple's iPad Pro will eat the MacBook market, and that's OK

Apple [AAPL] will eventually cannibalize its Mac business with a 64-bit big-screen iPad capable of running Office and a variety of creative apps. Here's why:

Let's look at the evidence

Strike one comes later this month on October 22 when the company is expected to introduce new iPads alongside OS X Mavericks and the much-anticipated Mac Pro. I've written about the Mac side to these plans before, but when it comes to iPads it seems Apple will place 64-bit A7 processors inside the new machines.

Now I know there's some who say 64-bit inside mobile devices is of little consequence. These are the same people who several hundred years ago would have insisted the world was flat while seeking the edge of the ocean. They're wrong.  These new chips are delivering significant performance improvements today, while also forming part of the 64-bit future of Apple's plans.

Think about it: iOS 8 and iOS 9 will inevitably exploit the potential of 64-bit, apps will benefit, and these devices will become ever better replacements for a PC. You get a 64-device today and should recognize that you're now plugged into Apple's upgrade cycle plans across the next two years. And in these plans the iPad is going Pro. It seems inevitable.

Get productive

Strike two: Barclays Capital analyst Ben Reitzes told clients this week that Apple intends developing iOS for a bigger and more powerful notebook-style iPad. This 64-bit beast will be able to run all those 64-bit apps developers have been inspired to begin working on thanks to the new A7 series processor. He believes this 13-inch iPad will cannibalize MacBook Air sales, cost c.$650 and should eventually grab 30 percent of the large tablet market.

Strike three: Apple now offers its iWork suite for free to new iPhone purchasers. It seems logical to imagine this will be extended to people purchasing new iPads. These new iPads will therefore ship pre-equipped with Office-compatible productivity applications. And if you think you need a keyboard for these, there's cases available to give you just that (until Apple as seems inevitable offers a better one).

Strike four: Microsoft's outgoing CEO, Steve Ballmer, has promised Office for iPad. There's lots of speculation as to when, but given both Apple and Microsoft share a common foe in Google, it's not beyond the realms of possibility the two firms have figured out a release schedule already.

There's been some expectation Office for iPad will ship in October 2014. When it does then an iPad will become a PC replacement for enterprises in one easy shot -- and Microsoft will begin to make money within the disrupted industry. That's assuming people still use Office by late 2014, of course.

There already is an iPad Pro

Strike Five: Apple already offers an iPad Pro -- it's not called iPad Pro, of course, it's just a 128GB version of its existing solutions that's aimed at professional markets. As the company put it in the press release concerning the new model:

"iPad continues to have a significant impact on business with virtually all of the Fortune 500 and over 85 percent of the Global 500 currently deploying or testing iPad. Companies regularly utilizing large amounts of data such as 3D CAD files, X-rays, film edits, music tracks, project blueprints, training videos and service manuals all benefit from having a greater choice of storage options for iPad."

Those are pro markets. Tellingly, supporting statements accompanied this press release from makers of pro apps, including AutoCAD, WaveMachine Labs, Apptitude.

Going for Pro

All this evidence makes it clear an iPad Pro is part of Apple's game plan for the device.

So what do we have?

We have 64-bit iPads set to appear in the next few weeks. These will likely boast battery life improvements and Retina Displays. They will ship with free productivity tools (iWork), and (according to Cantor Fitzgerald) will be thinner and lighter than the current models.

We have a company that's already focused on the pro markets for tablets. And, of course, there's one more thing:


A lot of people seem to think that offering phones with big displays is innovative. So far Apple clearly doesn't agree -- its iPad mini aims is its compromise. However, size does matter when it comes to PC replacement devices like the iPad. It makes absolute sense to deliver iPads in 13- and, in future 15-inch configurations.

PC sales melt down. iPads don't

Certainly these things would take a chunk from Apple's laptop sales, but so what? PC sales are shrinking already. We know full well that Apple doesn't mind losing sales in one category to feed them in another.

While no one seems to expect a 13-inch iPad will appear at Apple's October 22 launch this month, it could still make sense -- but given the convergences listed above introduction of such systems will make ever more sense in the 12 months ahead.

Meanwhile interest in iPads remains buoyant. Piper Jaffray's Gene Munster reports that iPhone ownership among US teens has climbed to 55 percent with 65 percent planning an iPhone purchase next time they buy a phone. iPad ownership has slipped slightly -- as you'd expect this end of a product cycle -- those Android gains are about to disappear if Apple hits market right with its new models.

The PC market is shrinking. With this in mind the iPad Pro will offer 64-bits of power in a thin and light form factor accompanied by a host of powerful new creative apps. Time to run an old movie -- only imagine this time it's an iPad that's marching into the room, not a Mac.

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Copyright © 2013 IDG Communications, Inc.

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