iPad 2 or iPad 1.5 Release Event?

A funny thing happened prior to the iPad 2 announcement event over the last 4 weeks. Instead of the focus on this new iPad, the attention has been shifted to the next next iPad with a predicted release of this fall. This rumor was mainly driven by Daring Fireball who has a very high hit rate on rumors concerning Apple products predicting that a second iPad release would happen this fall and that device would have the high end features rumored to be coming in the just released product.  Daring Fireball’s rationale for a new fall update rotation makes sense. Having the best iPad ready for the biggest buying season, and the iPad taking over the iPod’s fall event slot seems like a natural transition. (Already Appleinsider is stating that there will be no iPad 3 this fall, so we will see)

Now the biggest difference between what was announced today and what is predicted for the fall iPad 3 is around several big features.

1. A huge increase in screen resolution – the much marketed Retina Display. The real difference maker feature if Apple can almost double the iPad’s screen resolution while keeping the price point in the same range then they will have a huge edge on their tablet competitors.

2. A SD card slot. Although looking at the new iPad 2, it’s questionable if the alleged SD card slot is a future feature. The location of the SD card slot is occupied by other elements of the iPad 2. But the more MoD thinks about it, the SD card functionality is going to need iOS improvements before being a real difference maker. That reason alone could justify the delay. Of course, the camera connector kit has an SD card slot as well and with iOS improvements could be as useful as a true SD cards slot.

3. Mini Display port or Thunderbolt port? Apple now has an HDMI dock connector with power adapter available, so that might be the video out answer for the iPad 3. But a dedicated video out port or a Thunderbolt port is still a possibility.

With this rumor, sites were saying that the iPad 2 was really iPad 1.5 like the iPhone 3 to iPhone 3GS transition. They couldn’t be more wrong.

Looking at today’s iPad release, it seems that the right analogy is going to be a second iPad released this fall with those features is more of a iPad 2.5/iPad HD

The iPad has been completely redesigned and that’s not a 1.5 type release (even the new MacBook Pros just released with new tech didn’t redesign the case). Tech blogs continually underestimate the impact of changes in form factor on consumers. Consumers heavily judge mobile devices by a number of criteria, but weight, width/thickness, and battery life are certainly near the top. And the new iPad improves the first two and maintains an industry lead in the 3rd. Another major category is perceived speed of the device, and the iPad 2 by all initial reports improves upon that experience as well. (screen quality and price were unchanged)

Another overlooked element is that this iPad 2 will be available on Verizon that will put even more pressure on the RIM and Motorola tablets which will likely need heavy carrier push to hit their numbers. But by giving the iPad to Verizon as well, Apple negates a massive push by Verizon for either device. Neither RIM or Motorola seem capable of selling their WiFi only versions inside the brutal retail arena where they have no real consumer electronics presence beyond the cell phone stores inside retailers. Unlike Apple who has their own stores and their own section in most Best Buys. HP is a different story, but their tablet is still months away. Finally, it’s shipping in a week. Apple will have the device in stores and into the hands of carriers without ceding any real momentum to any other carrier.

You don’t redefine the form factor of the device and call it a .5 revision. However, what Apple may be setting up for this fall is a two product lineup for the iPad. (Presuming again a second iPad this year)

iPad 2 – the product we saw today with different storage configurations and the option of 3G connectivity.

iPad 2 +/HD/Pro – the product we saw today with a Retina Display and an SD card slot. It’s doubtful that Apple will add 4G to the iPad this year. But Apple may not want to wait until Fall 2012 to add 4G either. So a Spring 2012 iPad refresh is very possible adding LTE to both versions.

The key in this strategy maybe price. Apple will have the high end iPad with a display resolution no one can match at a similar price point with a faster processor and more ram, and then Apple attacks the low end with a great feature set at a price point which competitors will have to take a margin bath on to match. The final step in this pricing strategy might be a big iPod Touch to compete against the 7 inch tablet space.

iPad 2 HD –  599/699/799

iPad 2 – 349/459/549 (already the price of a refurb original iPad now that the new iPad 2 has been announced)

Rumored big screen iPod Touch (5 inch?)- $249

Apple is poised for a big iPhone summer if the rumors play out, and then could end the year with a huge iPad right before the holidays.

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