In the Market for a Tablet? No-Brainer to buy an iPad

on March 22, 2017

I am sure you know by now Apple has announced a new iPad model simply called iPad – aka the 5th Generation. This is not quite an update to the Air 2 as some of the features, such as weight and thickness, are the same as the Air.

The fact Apple did not hold an event for the announcement had more to do with not setting high expectations than with the significance of this product. The 9.7” iPad has been the most popular model for Apple. Since moving to the iPad Air line, Apple has been able to please customers who thought they wanted a smaller form factor. In reality, what they wanted was the higher portability that comes with a lighter device. The price drop of the older Mini generation helped buyers who wanted the most affordable iPad but would have not necessarily picked this product based on screen size.

Apple believes there is still a market opportunity for iPad both as people upgrade older models and as they discover iPads for the first time. For many consumers, however, making the jump to buying the first iPad or upgrading to a new model has not been easy. Depending on where you are in the process, there are either cheaper Android alternatives marketed as equals or the iPad you are using still fulfills your needs, making it hard to justify an upgrade.

This week, Apple made buying an iPad simpler and more affordable. The new line up is pretty clear:

    • iPad Mini is no longer the entry level iPad with consumers choosing this option based on form factor rather than price
    • No need to use the Air name as iPads are all lighter and slimmer than they were before the Air was introduced. I made the same argument for the MacBook Air when the new MacBook was announced and we’ll see if I am right
    • 9.7” is not only the most popular size but it is where Apple sees the future of iPad as it plays well in consumer, enterprise, and education. So the price aggressively comes down to $329
    • iPad Pro remains the flagship for people who want the best and/or people who are ready to make the switch from a PC or a Mac and make the iPad Pro their main computing device. The two sizes offer choice depending on your mobility requirements.

Tablets remain a category of device many consumers do not see as necessary. In fact, according to a GWI report, only 5% of online Americans consider a tablet as their most important device to access the internet, whether at home or elsewhere. This compares to 24% for smartphones and 40% for laptops. This lack of a clear role limits how much consumers are prepared to spend on them. Yet, when people use iPads satisfaction is high.

According to J.D. Power, iPads have the highest satisfaction in the category at 830 (out of 1000). Satisfaction is measured across performance, ease of use, features, styling and design and cost. iPads outperform the competition on every factor aside from cost. Apple just addressed this very point.

 Apple is not going to Concede the Education Market to Chromebooks

Tablets are not just a consumer play and Apple is very well aware of that. Over the past year or so, Apple has been focusing on empowering their iPads in the enterprise through partnerships with IBM and SAP. Education is another major market for iPads but lately, Apple has been under pressure from a growing number of Chromebooks being used, especially by K-12 schools.

While $329 is an aggressive price in the consumer market, Apple pushed even more on education and will make the new iPad available through its education channel for $299. Targeted, aggressive pricing is something Apple is willing to do for certain segments and done in a way that does not negatively impact the brand.

Apple also collaborated with Logitech to make a rugged case available through the same channel, priced at around $99. Logitech will also offer an add-on keyboard for the rugged case and a “Rugged Combo”.

While even at this price, Apple remains higher than Chromebooks. But there is more than just iPad Apple brings to the table compared to Chromebooks. Once the price gap closes, the other factors hold a different weight. Apple’s app ecosystem is much larger than what Chromebooks have to offer and the fact Android apps will run on Chromebooks will not make the situation much better. Many of the Android apps available in the store are still not optimized for tablet use, which of course, limits how user-friendly and rich the experience can be. Accessories ecosystem is also a plus for Apple as it lets the iPad better fit in with other tools teachers might be using in the classroom. The last point I think worth mentioning is security. Apple’s strong focus on privacy and security for its devices and the apps that run on them is an added benefit I am sure schools consider. Google and Apple both offer specific education tools to monitor access on the devices to limit vulnerabilities but the cloud/browser-based nature makes that more challenging. Of course, the fact Google Docs work well on iPad is a reassurance for teachers who are invested in those tools.

The education market is certainly becoming a battleground for Google, Apple, and Microsoft. It will be interesting to see who will focus on a more holistic experience that centers on empowering teachers and students to teach and learn vs. facilitating admin and management of kids and staff.

In Other News

There were more Apple announcements on Tuesday.

There was an updated storage option for the iPhone SE that now starts at 32GB for the same price of $399 and a small $50 premium for the 128GB version. This is a sensible move by Apple to future-proof this line for further software upgrades.

To celebrate the ten year anniversary of support for Product RED and the fight against HIV, Apple released a RED iPhone. This is a first for Apple who have done several RED products over the years — iPods, Beats headsets, iPhone and iPad Cases — but never an iPhone.

Lastly, Apple announced Clips, a video editing app that will be available as a free download in April. Despite some confusion on social media, this is NOT a competitor to Snapchat or Instagram. Clips is about creating content to be shared on the social platform of choice. iPhone is used more and more for pictures and videos and giving users the opportunity to add features such as stickers, lenses, and filters makes a lot of sense. Apple is aware, however, that its audience is not made up of social savvy teenagers only. So Clips comes as a separate app rather than being integrated into the main camera app. First and foremost, this approach avoids annoying users who are not interested. It also offers Apple an opportunity to further develop Clips by adding other capabilities in the future – think AR.

It remains to be seen, however, if avid Snapchat and Instagram users will be interested in creating the content in Clips before they share it through their social platforms. If Clips takes off, Apple would have created direct user engagement and would have shifted value back to the hardware and, ultimately, leave to the social network platform the delivery portion of the engagement.

Clips is a great example of the kind of first party apps Apple should be focusing on to add value to hardware. While the wider ecosystem is a great strength and the balance of keeping partners and developers engaged is tricky, there is certainly room for Apple to do more.