A recent report from KGI Securities analyst Ming-Chi Quo suggests that Apple appears ready to restructure the iPad Product line. The goal is, apparently, to clearly correlate increasing size and sophistication with price to make sure customers can upgrade or enter the market at the desired level. Ming-Chi Quo believes sales and ASPs will benefit, but there may be more going on.
Clarity of Marketing – Not
When the iPad Pro 9.7 shipped in March, 2016 it had a few features not available in its bigger brother, the 12.9-inch model. That included the True Tone white balance adjustment, a slightly wider color gamut, a slightly faster rear-facing (iSight) camera lens and 12 vs. 8 megapixels. Dr. Raymond Soneira declared it to be a truly impressive major achievement.
It almost seemed like Apple had some tech it wanted to roll out, but it wasn’t ready for the 12.9 inch model back in November of 2015. So the improvements were rolled into the smaller 9.7-inch model four months later. This seemed like great technology but inept marketing.
I think it’s safe to say that we all expected Apple to bring the 12.9-inch model up to par in the late fall of 2016. That is, the 12.9-inch model would become as technically advanced as its little brother and include the A10X chipset, the iPad version of the A10 found in the iPhone 7. But it didn’t happen. Apple was silent on the matter.
Sources differ, but one possible explanation was poor yields of the A10X chipset fron TSMC. That’s based on a 10 nm fabrication process which is state-of-the-art. Later, TSMC refuted this claim, but we don’t know the truth. It’s safe to say that if Apple could have shipped new iPads with the A10X last fall, it would have.
This week, as mentioned above, KGI Securities thinks that Apple is going to ship, possibly, a trio of new iPads in 2017 Q2.
I view this as an opportunity to bring some feature coherence to the product line in that, as one might expect, smaller iPads are less capable and less expensive and the larger iPads have more features and cost correspondingly more in an understandable way.
Intriguing is the mention of possibly three sizes: 9.7, 10 to 10.5 and 12.9-inches. This could be Apple experimenting with different sizes, but I think it’s more likely Apple is trying to find the magic formula that both ignites sales, provides a best fit for the customer, clearly defines the product line, and maximizes the Average Selling Price (ASP).
Think of it as a return to the “good,” “better,” “best” philosophy. Being able to select the iPad with the right set of desirable features and corresponding size and price (with all being Apple Pencil capable) would bring a satisfying sense of cohesion to the iPad line that hasn’t existed in awhile.
My feeling has been that Apple fell into the trap of confusing the customer about what to buy, the benefits, and the feature choices by doing technology leapfrogs across the sizes. If that’s what Apple is fixing, it’ll be worth the wait.