Apple's iPad gets just enough of tune-up to pack a punch

SAN FRANCISCO Thu Mar 8, 2012 5:53am GMT

Apple CEO Tim Cook introduces the new iPad during an Apple event in San Francisco, California March 7, 2012. REUTERS/Robert Galbraith

Apple CEO Tim Cook introduces the new iPad during an Apple event in San Francisco, California March 7, 2012.

Credit: Reuters/Robert Galbraith

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SAN FRANCISCO (Reuters) - Apple Inc's latest iPad sports a crisper display and an array of technology advances that, while less than revolutionary, may prove enough for now to keep rivals like Amazon.com Inc and Samsung Electronics Co Ltd at bay.

While stopping short of vaulting ahead of Motorola and Samsung, the device -- which comes 4G-ready and boasts a quad-core graphics processor -- is capable enough to help safeguard its two-thirds market share. "The screen is a notable feature for non-techie customers, as is the faster connectivity. That's something that mainstream consumers can identify with," said Morningstar analyst Michael Holt. "There's pent-up demand because a new device was widely anticipated. I they've made enough incremental improvements to do well."

Other analysts say the faster processing may begin to draw heavy gamers, encroaching on turf now dominated by gaming-hardware makers such as Microsoft or Sony.

Chief Executive Tim Cook, presiding over his second major product launch after debuting with 2011's voice-enabled iPhone 4S, introduced the highly anticipated third iteration of the tablet, which is available for pre-orders from Wednesday and will hit store shelves March 16.

But he stumped many in the audience by breaking away from the tradition of calling the third-generation tablet the iPad 3, as some had expected, referring to it simply as the "new iPad."

The company said it will continue to sell the iPad 2 but dropped its price by $100 (63.57 pounds) . The older tablet now starts at $399 while the new third-generation wi-fi only iPad starts at $499.

The high-end model of Apple's latest iPad starts at $629 and will be capable of operating on a high-speed 4G "LTE," or Long-Term Evolution, network. At speeds roughly 10 times faster than current 3G technology, that may help banish the sometimes shaky video quality of older devices.

Wall Street had anticipated many of the features Cook showed off on Wednesday, including a higher-definition "retina display" screen - containing several times as many pixels within the same area - and a better camera.

Shares of Apple closed barely higher, up 43 cents at $530.69. They hovered around $530 throughout the unveiling event, which was attended by Marc Benioff, CEO of enterprise cloud computing company Salesforce.com Inc; Jeremy Stoppelman, CEO of online business review site Yelp Inc; and influential venture-capitalist John Doerr, among other industry luminaries.

Some had held out hope of a positive Apple surprise, recalling late CEO Steve Jobs and his now-iconic "one more thing" at the very end of such announcements. Others said the upgrades and tweaks to the iPad could only go so far in fending off hard-charging competition.

"While the hardware is notably enhanced, with an impressive retina display, better camera and faster processor, there are still some areas of improvement that Apple needs to work on, in order to stay ahead of its encroaching competitors," said Fred Huet, managing partner at Greenwich Consulting.

"As tablets are increasingly being used for personal media consumption, it is promising to see a better screen resolution. But will this be enough to ensure Apple's competitive lead in the marketplace? No."

Others say Apple is betting a 4G-equipped iPad will tempt more U.S. consumers to pay for higher-quality video on the go. That, in turn, should give Verizon Wireless and AT&T Inc a revenue boost, analysts say.

"THE NEW IPAD"

Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc, and AT&T will host and sell 4G wireless plans to 4G iPad users.

Until now, buyers have been reluctant to shell out extra cash even for iPads with slower 3G connections. The cheaper WiFi-only model, with much more limited Web access, is by far Apple's top-selling one today.

An updated version of the WiFi-only model remains at $499. The most expensive 4G model, with 64 gigabytes of storage, will go for $829. The previous iPad2 with 3G also sold for $629 to $829. The cheapest model of the previous-generation iPad 2 now retails at $399.

"The iPhone 4S showed us that Apple doesn't need to out-do itself with new product designs to continue extending its domination of a category," said CCS Insight analyst John Jackson.

In an apparent departure from naming conventions, Apple's third-generation tablet will not be called the iPad 3, but simply referred to as the latest iPad, a small point that several analysts and executives noticed and pointed out.

Forrester analyst Frank Gillet said most of Apple's other products, such as the iPod or the MacBook Pro, do not warrant new appellations every time they go through an upgrade. Apple may even drop the numerical extension for the iPhone, he added.

Regardless of the name, the company is counting on a warm reception to its latest tablet to fend off an increasingly aggressive challenge from tablets powered by Google Inc's Android technology, with Microsoft Corp software-driven devices slated to come soon. "Everyone's been wondering who will come out with a product that's more amazing than the iPad 2," Cook said.

"Stop wondering: We are."

POST-PC ERA

Earlier in the proceedings, Cook again held forth on what he called a "post-PC world," in which users move increasingly away from traditional desktop and laptop computing and toward an array of portable devices, including tablets.

Smartphones and tablets are starting to eat into PC sales as mobile technology gets more advanced and available content expands.

Some experts believe mobile devices, as they get more powerful, will eventually displace PCs in many markets, hurting business for the likes of Hewlett-Packard Co and Dell Inc.

The global tablet user base reached 67 million in 2011, according to researcher Strategy Analytics. Analysts expect double-digit growth in tablet sales in coming years.

Cook also announced that the company's new $99 Apple TV set-top box, a concept that late CEO Steve Jobs had called a "hobby," now supports high-definition 1080p screen technology.

"Last year alone we sold 172 million post-PC devices," Cook told the audience at the Yerba Buena Center in downtown San Francisco, Apple's preferred venue for product unveilings.

"And this made up 76 percent of our revenues. This is incredible."

Cook's performance was again the subject of scrutiny. The CEO replaced famed showman Jobs after the co-founder's October death, and has since drawn several comparisons in terms of onstage charisma.

Some in Wednesday's audience found the event wanting.

"This iPad 3 launch is horribly boring. Steve, I miss you terribly," Salesforce's Benioff tweeted at the end of the proceedings. "Tim Cook didn't thank or remember Steve Jobs at iPad3 launch. There would be no iPad 3 without Steve Jobs."

(Additional reporting Noel Randewich in San Francisco, Nicola Leske and Sinead Carew in New York, and Bill Rigby in Seattle, Writing by Edwin Chan; Editing by Gerald E. McCormick and Tim Dobbyn)

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