At Today’s Apple’s Event, I got a question over and over again. I thought I would share my thoughts on it. First off, the question, “Did Apple do enough?” is the wrong question. The correct question is, “Did Apple release a better product than they did last year?” Of course the answer is yes. A smart fellow once told me, “If it is worth doing, it is worth improving.”
We can view product enhancements and demand the revolutionary without realizing that revolutionary requires evolutionary improvements. Leaps in innovation don’t happen without the evolutionary cycles that come before them. But what matters is that each year’s product is better, in a fundamental way, to meet the needs of current and new customers.
I have a core thesis that Apple does not really have any competitors. I know many disagree and we can debate this from a business, strategy, and market standpoint, but from a product standpoint I believe this is true. In fact, I believe Apple’s primary competitive product benchmark is last year’s model. This is why the correct question is whether or not Apple released a better product compared to last year’s version.
Is the new iPad Air better? Yes. Is the new iMac better? Yes.
Getting that out of the way, let’s look at why it matters to today’s announcements.
Today’s Announcements
iPad. In my mind Apple did several important things for the iPad product family. The first is Touch ID. While it may seem like an obvious upgrade, it is also significant for two reasons. In enterprise accounts, where the iPad is nearly universally deployed in some way at Fortune 500 companies, Touch ID is an extremely important improvement. We can debate whether the iPad has peaked in consumer markets but one area I am absolutely certain it has not is in enterprise. What is key to understand about the iPad in enterprise accounts is it is not being deployed to replace notebooks or desktops in most cases. Rather, what it is doing is bringing a computer to a field worker who used a simple handheld device or no computer at all.
The iPad is being deployed to many mobile field workers who are generally on their feet all day. Public safety, construction, employees doing truck rolls or installs, compliance officers running routine safety checks on oil rigs, power plants, etc. These mobile field workers usually use a clipboard and have may never have used a computer regularly in their day job. Desktops and notebooks are designed to be used while sitting down, not walking around in the field. This is the enterprise use case for which the tablet form factor is best designed. But because these workers are mobile, they are also the more likely to lose or have their work tool stolen. This is where Touch ID is critical. Enterprise has been clamoring for Touch ID on iPads for the security elements they enable. The upside for the iPad in enterprise is still large and Apple’s partnership with IBM will greatly enhance this.
Enterprise sales alone won’t continue to drive annual iPad growth. So what is the current story for consumers?
Apple has shared a statistic over the past few quarters. 50% of iPad buyers are new to the iPad. This is a key metric. Rather than look at Apple’s lineup and wonder if it will drive upgrades, look at it and wonder if the current lineup is inviting to first time iPad buyers. Here is the full lineup.
From beginning to end, Apple has an iPad for nearly every price point. By keeping the original iPad mini in the mix at $249, Apple has an attractive price across the board. This is a key story when we think about first time buyers. Not everyone needs the current generation iPads. Last year’s models serve a purpose in helping fill price gaps and giving consumers more options.
The challenge of thinking about upgrades is we still have literally no idea what the consumer upgrade cycle is. We have estimates about how many Gen 1 and iPad 2s are still in use and it is a significant number. But we have no read on if those consumers will upgrade at this point. Because of that, predicting the consumer upgrade cycle is near impossible. It could happen one random quarter and catch everyone off guard or we may get early signs. But right now, we don’t know. So in my analysis, I’m focusing on the story for first time buyers. And that story is strong with the full iPad lineup.
Retina iMac. Lots of interesting things about this computer. The first is I joked Apple made a 27″ 5K TV for $2499 (less than a 4K HDTC) that just happens to include a computer. The display is something to behold when you see it. With this product, Apple continues to cater to their bread and butter customers – the creative professionals. This is a product a creative professional will see and say it is NEEDED not it is just wanted.
Whether you make movies, TV shows, create graphic arts, edit photos, etc., there is literally no better option than this 5K Retina iMac. I expect significant demand for this iMac and let’s hope Apple can keep up with it.
Tying it All Together
Again Apple has emphasized the story of their ecosystem. During the event I tweeted:
Key point from Cook – Apple’s products are designed to work together seamlessly. Very different reality than other ecosystems.
— Ben Bajarin (@BenBajarin) October 16, 2014
The hardware story, iOS 8 and OS X Yosemite with features like Handoff and Continuity strengthen the ecosystem. No other company is addressing the full lineup from desktop, notebook, tablet, smartphone, and soon a smartwatch, to work together this harmoniously from a user experience standpoint. If you are going to own any combination of computers from PCs, tablets, smartphones, and eventually a smartwatch, Apple’s seamless ecosystem is presenting itself with the strongest offering across categories. This is the heart of the “only Apple” narrative.
I’m sure the display is stunning, but I have no idea as to how much of the $2500 to attribute to it.
As for the “included computer”, an i5 is quite mediocre. To help me with the value proposition, I configured one to more closely match my current machine. It costs $3600!
Considering that I can build a comparatively spec’ed machine for about $1200, I estimate the value of the monitor at about $2000 or so. That may be a good value in and of itself. A top flight 4K 32” monitor can be had for $2200, a 27” 4k at anywhere from $600 to $1500. I guess the 5K is not that far off, assuming that it’s an IPS panel and not a TN.
It’s the computer part that leaves me wanting. SInce it’s also non-serviceable, as much as I like OSX, the value doesn’t add up for me.
“the value of the monitor at about $2000 or so”
It’s probably the same panel as the recently announced but not yet available Dell UltraSharp 27 Ultra HD 5K, which will cost $2500. And yes, it’s IPS.
This means that if you buy the monitor from Apple, the base model computer comes with it for free.
Thanks. It does sound like a stunning monitor.
So does the Dell… 🙂
Hopefully this will put pressure on Dell, and other’s, to drop the price of the monitor. Clearly they are overpriced. As you say, the iMac has the equivalent of an Mac mini in it. That’s $500. So around $2000 is where it should be.
” the iMac has the equivalent of a Mac mini in it. That’s $500.”
Not hardly. Imac has desktop quad core CPU with much higher base clock and higher thermal overhead, discrete graphics, and a fusion drive. Oh, and twice the RAM. They aren’t really comparable at all, even the $999 mini is still is only dual core, with 1ghz slower base clock and ~400mhz slower turbo, much lower thermal overhead, and Intel graphics instead of AMD graphics.
I went to dell.com, looked at their traditional mini-tower desktops (which I assume are the cheapest form factor) and discovered that it’s not possible to get a quad core i5 3.2ghz processor with integrated graphics and no SSD (ie, inferior to the retina Imac on all 3 metrics) for less than around $700. Discrete graphics costs you about another hundred, and while I couldn’t figure out how to add an SSD (dell used to have such nice configuration tools, what happened?), that would probably push the price to near $900 with no monitor included.
Yes. You’re right. There is no quad core Mac mini. That serves to push the monitor contribution lower. Problem is, what if I just want the monitor? Why pay for a computer I don’t want or need? There may be good reasons for this, or not.
Let’s use your base numbers. $700 + $300 AMD R9 290, 32 GB mSata SSD $60. The base model does have 8 GB RAM. And don’t forget that it’s user serviceable. Total cost: about $1060.
For $1000 one can build their own that exceeds the hardware specs of the iMac without screen. Even better if the happen to have spare parts.
Point is, great monitor, mediocre computer. Speaking only for myself, I would rather drop $2500 on a monitor only than this. Probably going to be able to get a 32″ 5K for that soon enough. 32″ 4K available now for less.
Criminy. I don’t even have enough room on my desk for a 27″. You want a 32″? Geez-a-re.
Joe
For that kind of money yewbetcha! (Apologies for the Palinism)
Yeah, there is a lot of misunderstanding between the i3, i5, and i7 CPUs. You can get an i5 that will outperform certain i7’s. Some i5’s are more expensive than some i7’s. You can even get an i3 with hyper-threading. The i5 used in the new low end iMacs and Mac Mini’s have hyper-threading. Hyper-threading and on board L3 cache are the big differences between the i5 and i7. Then there is power usage.
It isn’t as easy as saying i7 is “best” and the i5 is “mediocre” and i3 is the “poor man’s cpu”. It all depends on application. And most software (including most games) don’t take advantage of hyper-threading. For instance Final Cut Pro does not (so I’m told). Final Cut X does. So the i7 at the most high end available, is only most valuable to certain users, not everyone. And at that point many start leaning toward a Mac Pro with a Xeon processor.
It was once held that the slowest part of any computer is the user. An i7 of any configuration won’t fix that.
Joe
Dell announced a similar 5120×2880 display — it’s probably the same panel, in fact — and the early suggestions were that it would retail for $2500 for the monitor alone. It’s definitely in the right ballpark price-wise.
Actually, hertz for hertz, the i5 is comparable to the i7. The differences are really technical and most software won’t even take advantage of the i7. That’s why to go from a 3.5GHz i5 to a 4GHz i7 is really not that much and not out of line with most any other 27″ all-in-one that even offers an i7 option (which are not as many as I would have thought.)
That said, I have a hard time thinking this iMac is targeted to pro video shops, except maybe as a proof machine for clients or account execs. Maybe light weight corporate presentation companies. Maybe. I really can’t figure out who this is for. OK, maybe CAD/CAM work would really appreciate the resolution. Line weights are hard to distinguish even at 1080HD.
Joe
Yes, the new iMac looks like it will be very popular with professional video people. I think it could eat into Mac Pro sales. I was a little surprised that Apple didn’t show a 5k display for the Mac Pro, but I suppose they will sell all of the retina iMacs they can make over the holidays. Perhaps an Apple 5k display will show up sometime next year.
The cameras and video editing on the new iPad could be compelling for young, amateur video people. I thought the video editing demo was amazing.
Ars as a nice write-up about how the 5k display is beyond specs for DisplayPort and Thunderbolt 2, and needs a proprietary (well, probably just overclocked) video circuit in the host computer. I’m guessing this this harder to do for discrete HW than for an AIO; and maybe Apple is waiting for updated standards.
Good point. A standalone 5k display might not work on the Mac Pro as it is shipped now.
Sure, but I would hazard to guess that most companies doing hi-res video work are using a 4k on that Mac Pro. At that point, the added benefit of the 5k is pretty negligible. For video work, the Mac Pro is better capable than even the iMac supe’d up. Personally, and I could be wrong, I don’t see the pro video market as a prime customer for this iMac, except as a low cost supplement to their shop for low end use.
Joe
The iPad mini is my primary computer. I regularly write documents that consist of thousands of words using my thumbs. It has the best thumb keyboard ever (portrait orientation) I have two.
I returned last year’s model and stuck with the original for another year because of the weight gain.
I usually don’t caucus with the trolls but the peanut gallery at MacRumors nailed today’s event. I’m very disappointed.
Even though the iPad mini supposedly has a customer sat rating of 100%, Apple phoned it in today. No processor bump, the same thickness, and the same weight.
The iPad needs better apps, especially in productivity, publishing, and shopping. Apple didn’t change the state of the iPad market today. The trolls got it right. Ben got it wrong.
We troll ourselves if we don’t keep our sellers on the ball.
Which part do you think I got wrong? I never made any predictions for this event.
I don’t disagree with your predictions (I didn’t read that article). To clarify, I disagree with your assessment of the iPad announcements in the above article.
iPad mini sales have probably tanked, which explains the lame upgrade. However, as someone who bought and returned two iPad mini 2’s a year ago, I feel that the iPad mini has failed because Apple doesn’t realize what makes the iPad mini such a versatile computer — size and weight.
The iPad mini needs to break the 300 gram barrier. It also needs to match the iPad Air in thinness. Adding a retina display last year made it heavier. That’s the wrong direction for this device!
A few related points. The iPad mini doesn’t need an A8X but it should have an A8. It should have 2 GB of memory but probably only has 1 GB (Safari allows for unlimited tabs but there’s no point if web pages don’t remain loaded). And finally, the iPad mini 2’s design resulted in low volume from the speakers compared to other iOS devices. I need to visit an Apple Store to see (well, hear) if Apple fixed this problem. There’s a huge thread about this on Apple’s website.
https://discussions.apple.com/thread/5564245?start=0&tstart=0
The iPad mini had so much promise two years ago. I hope it gets back on track next year, but I’m concerned that the iPad mini 3 might be the last iPad mini Apple ever ships.
To be clear my above statements were not about the mini but the iPad Air. That’s they one I meant was made better. I do agree with you and it is unfortunate but I fear the Mini is simply not a priority given ASPs, margins, mix shifting to Air anyway, iPhone 6 Plus, etc.
The data we have overall is simply not favorable with small tablets. They keep declining in sales consistently. Trend is shifting to larger tablets which is being driven by larger phones increasing in sales quarterly.
I know you wrote about the iPad Air 2. I wish you had tempered your enthusiasm given the disappointing iPad mini 3 but if you don’t use one for work I can’t blame you for not realizing its potential.
I can’t overstate how good the iPad mini is for thumb typing. Try writing a Tech.pinions article using your thumbs in portrait mode.
I don’t see why it has to cost less. I’d happily pay more for the iPad mini because the smaller size is what makes it such a joy for writing not to mention it’s many other virtues. But it needs to be lighter.
I don’t use an iPad Mini for a variety of reasons but certainly do see it’s enterprise benefit. In fact in the field worker use case I outlined above the mini does very well for many out in the field. POS retail as well, and many other use cases. The point there, however, is that they don’t require much compute. They are simple use cases.
The mini is still a valid category and the knock on Apple for not bringing it the A8x is a solid point. But given what I’m seeing as the bulk of usage and even the shift in mix I can see the logic behind the decision. But clearly folks are disappointed so I understand.
I’m curious as to what iPads’ sales volume and mix/ASP will be in the coming months.
The top-line iPad has remained stable since launch it seems ($500), and all line extensions have been downwards, notwithstanding extra storage options. The Apple premium is steeper than ever though, with other nice midrange tablets, say the Lenovo Yoga 10″ HD, at $250, and entry-level branded ones at $200 (Lenovo, Asus, non-HD). Premium Androids do play in the same ballpark. The whole Apple vs ROW and premium vs value in an unsubsidized market is interesting.
I’m puzzled at how Apple choose thinness over battery life and sturdiness. And despairing about ever more pics being shot w/ tablets, but it seems a large viewfinder and the ease of showing pics off and emailing them off the same device is making ever more converts. Darn. As for the phoning it in part, it’s indeed hard to find a reason for existing users to upgrade to the new models, or prospective punters to be swayed by the refresh. The tablet space is fairly vibrant, with new formats (Lenovo’s Yoga line), Pen input (Galaxy Note), ability to run Desktop apps (Windows tablets), a wider array of sizes (MS’s, Samsung’s and Lenovo’s 12-13 inchers)… Apple’s answer to that seems to be TouchID, camera, and keeping old stuff around at lower prices. Meh.
To paraphrase Steve Jobs, how many hours do you need? If 8-10 hours isn’t enough for your job, get a second iPad. That’s what I did though I rarely need to switch. If you’re a consumer playing games, shopping, watching videos, etc., plug it in after your session and get some fresh air.
Thinness is important for many reasons, chief of which is thinner means lighter. If you hold an iPad for hours weight becomes the most important specification. Putting an iPad in a keyboard case turns it into a laptop. No thank you! If I wanted a laptop I’d use a MacBook Air.
Ref the iPad upgrade cycle. I still use my iPad 1 on a daily basis since puchase over 4 years ago. Okay, its crashes occasionally on complex web sites – Facebook is the worse – and being stuck on IOS5, it will not run many new apps. However, everything appears to be fully functional, even the battery, so it seems wrong to ditch it since it continues to satisfy 95% of my needs – and keeps me off Facebook! I suspect the iPad 2 with a more powerful processor does not have the same crashing issues.
As an aside, what I really like about my iPad1 is Apple’s original implementation of Google Maps – far better than Google’s own current app. The page turn to go from map to satellite view is so easy to use. This is what I will miss most when my iPad dies.
I use my iPad quite intensively, perhaps 2 to 3 hours a day, and based on my own experience and the increased power of later models, would place to average upgrade cycle at close to 4 years.
To me the iPad line up right now is a mess. At this point Apple shouldn’t be selling any iPads with an A5 chip. And the mini 3 should have received A8 or not been upgraded at all. Just keep mini 2 at $100 cheaper. Of course the argument will be the $399 mini 3 is Apple’s cheapest entry point to Pay. But is Touch ID and the ability to use Pay really worth $100? I don’t think so. Obviously Apple wants people to buy iPad Air but they shouldn’t beat around the bush about it. I suspect the 1st gen mini will be gone from the line up in 6 months or less. And if the retina mini doesn’t get an upgrade then that’s Apple’s way of signaling the mini will be phased out.
Spot on! To me, all devices using the A5 processor should be gone. This doesn’t just create less confusion for consumers but creates less headaches for developers by allowing them to move forward instead of focusing on backward compatibility. The A5 is like Apple’s “Windows XP.”
I think many commenters here misunderstand the tablet market and Apple’s strategy. The idea that year after year Apple has to come up with mind blowing new products which make last year’s buyers sell their current iPads is wholly unrealistic and doesn’t reflect the market.
Surveys (and some comments above) and Ben’s text tell us that people keep and use their their iPads for several generations. If you own an IPad 1 or 2 then the iPad Air 2 is a huge step forward, if you had any inclination to upgrade from a 1 or 2 there is certainly a lot to draw you to an Air2. The number of people who own an iPad Air 1 who would realistically upgrade to an Air 2 would be small based on all the evidence. Even with some impressive unknown tech shown off in the air 2 there wouldn’t be a sizeable Air to Air2 upgrade simply because the job to be done isn’t changing drastically, at least in the consumer field. I think Apple has done the right thing in terms of its previous customer base.
The other part of the equation is new buyers. Potential first time tablet buyers will have a budget in mind and even if they exceed that budget by 30% there are now more entry points into iPad ownership to appeal to almost anyone. The lowest iPad mini is essentially the price of an iPod Touch with a series of higher value propositions to attract customers. Those who claim that slower, older models should be dropped miss the importance of the pricing strategy they create. This broad swath of entry points into iPad ownership strikes me as a solid strategy. Will it confuse potential customers? If you show up at an Apple Store with $275 to spend I don’t think you’ll be confused, price will dictate a lot. Remember, with high “customer sat” on all iPads, today’s customer at the lower end becomes tomorrow’s customer for something more.
Some have mentioned the 2 in ones that will be heavily pushed this shopping season. They will certainly attract some customers but like 3d tellie they so far havent created a vibrqnt market niche. Simply put, people want iPads which still vastly outsell other tablets except for those purchased in Asia for entertainment purposes.
I do believe Apple will introduce a 12.9″ iPad in the nearer term which will stretch into professional areas including Grahic Design, Photography, video as well as serious wordsmiths, researchers, analysts and certain business types. The iPad market is hardly tanking as someone suggested elsewhere but the idea that the incredible uptake of iPads would continue at its previous pace has been shown to be based on erroneous assumptions. There will be steady moderate growth of iPad sales as the jobs to be done doable on a tablet expands. This requires software and hardware development in tandem and will take time.
A lot of people suggest that long upgrade cycles are a bad thing. However, from a consumer standpoint, a device that lasts a long time and that you don’t have to replace every few years is a godsend.
We in Japan used to joke that Sony planted a “Sony timer” in their devices so that they would break shortly after the warranty expired. That was bad for customer satisfaction. Focus on replacement cycles isn’t a good idea.
What’s important, and as Ben mentions, is that more and more people are using iPads and liking it. That definitely seems to be the case, and Apple is doing well in that regard.
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