The Fall iPad 3 Launch Rumor That Won’t Die

So the Apple launching an iPad 3 this fall rumor just won’t die.

It started with Daring Fireball predicting an iPad 3 this fall before an iPad 2 was even released, and has been rolling ever since with other reputable sources such as MG Siegler also reporting that Apple has something big planned for this fall.  And, on Thursday DigiTimes  entered the fray indicating that their sources indicated the iPad 3 would be heading into production in September/October. Digitimes record inconsistent at best, but always based on information from the type of vendors/partners that Apple uses to build their gear. And that supplier chain has often been the source of the best Apple rumors. It had the iPhone 4 before the infamous brewpub incident, and had data on the iPad 2 based on case supplier prototypes. Now, there’s one obvious feature for this imaginary product and it’s a higher resolution screen, the elusive retina screen iPad.

MoD does not believe that the iPad 3 is coming out this fall. Apple cannot make enough iPad 2s right now, and has a huge launch of the new iPhone 5 coming up. It just doesn’t look like Apple’s suppliers are up to the task of handling two iPad production lines. I personally think the big Apple news this fall is an all assault on Android smartphones and some very new version of the iPod Touch. I don’t think that Apple can produce an retina screen iPad at a reasonable price point right now. The LCD production yields for the required display resolution are probably too low, driving up the overall cost. The touchscreen flat panel is one of the most expensive components of the iPad2.  The battery life hit for that sort of screen is going to be too high, in addition the processor needed to run that resolution at a proper speed is another huge question especially at the size/energy ratio that Apple needs. However, let’s say Apple does release an iPad 3 this fall what would that mean?

This retina screen iPad 3 launch would basically be Steve Jobs asserting that Apple is going to own the tablet market and sees no reason to let up. It’s the equivalent of John McClain shoving Hans Gruber off the Nakatomi tower and EMPTYING a whole clip of bullets into Alan Rickman. Apple’s already so far ahead with the iPad 2 and has iOS 5 arriving to bring an enhanced tablet experience that an even better iPad 3 is a powerslam off the top rope after winning the WWE title.

iPad 3 or iPad HD would probably be priced slightly above the current iPad 2, or allow Apple to lower the price on the iPad 2 to $399 to apply even more price pressure and margin pressure to their competitors. A $599 price point for an entry level iPad 3 makes sense, allowing Apple to move the 16gb iPad 2 to $399 and the 32 GB iPad 2 to $499. Any higher entry price and Apple could give the opposition a price opening. There’s a quote that’s been thrown around lately from Jobs in 2004 about how in the mid 80s when Apple with the Mac had a monopoly on the GUI PC and that after Jobs left the “Sales guys” (Sculley) kept going for margins when they should have gone for dominant market share and focused on the next Mac OS. This iPad 3 launch would be guaranteeing that Apple would never make that post Mac launch mistake again.

The iPad 3 launch would mean that Steve smells blood in the water, and the lukewarm customer response to the opposing tablets certainly adds a strong odor of chum. A unique moment to dominate this tablet industry in the same way that Apple never lost control of the MP3 player market after achieving dominance. The iPad 3 would destroy the RIM Playbook, the HP Touchpad, and send all the Android tablet hardware developers scrambling at a time when many of them are debating the wisdom of being in the tablet game since unlike Android smartphones the carriers cannot sell their products for them. And it would further establish Apple’s dominance going into 2012 and the arrival of a parade of Windows 8 tablets from vendors that actually understand consumer electronics retail. This early iPad 3 could “Zune” the Windows 8 tablets in the same way the iPod Touch destroyed Microsoft’s attempts to compete in the MP3 market. An iPad 3 could be a pretty pricey device, so if Apple was able to sell it for $599 it would show their commitment to pricing and lower margins for the pursuit of market dominance. Apple certainly has the component buying leverage, and billions in cash for up front commitments with vendors to make this strategy work. As Daring Fireball suggested, it could be that the display fabs to produce all these high end LCDs were part of Apple’s secret 4 billion dollar investment coming to fruition. And that 4 billion dollars if it leads to Apple’s dominance of the tablet industry will have been money well spent.

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