January 30, 2013

The 128 GB iPad: Why Now?

It seems like only yesterday that we were talking about a new, rumored 128 GB iPad. That’s because it was only yesterday.

Yesterday morning Apple surprised us all when they suddenly announced the upcoming arrival of their “newest” iPad, the 128 GB 4th generation with Retina display. In truth, it’s only as new as the “new” 4th gen iPad is new, which is still relatively new. (I get points every time I use the word “new” in an Apple piece.)

The only difference between this iPad and the iPads you can walk into a store and buy today is the amount of flash storage. Otherwise, it still has the Retina screen, still uses that new-fangled Lightning connector, still ships in either black or white.

“So why this larger iPad, and why now?”

This is the question on everyone’s* mind today, and as you’d expect, there are many differing opinions.

The timing of this release is interesting in more than one way. First, Macworld / iWorld begins this week in San Francisco, and while Apple hasn’t officially been a part of this conference for a few years now, this announcement only gives these Apple fans something else to discuss and drool over with one another.

This announcement also happens to come just days after Apple gave their quarterly earnings call, sending their stock into a brief free fall and landing them, once more, as the second most valuable company in the world.

Though Apple earned record profits during their holiday quarter, according to the Cult of Mac’s John Brownlee, they’ve been earning fewer and fewer profits each quarter.

Another interesting data point: Mac sales were down last quarter (either due to supply or the shrinking PC market) while iPad sales were up by 48% year-over-year.

There’s also the tiny fact that Apple earns more profit on the higher capacity iPads. Looking to a handy chart drawn up by Mr. Brownlee, Apple earns 37 percent profit on every 16 GB iPad, 44 percent for every 32 GB, and 48 percent for every 64 GB. Following this pattern, Apple stands to make more than 50 percent profit on every 128 GB iPad.

That’s assuming, of course, that people will buy these things.

One final and interesting point about Apple’s timing:

As noted by John Gruber, Microsoft’s Surface Pro goes on sale for the first time next week, starting at $899 for a 64 GB model.

Microsoft has been pushing these tablets as laptop replacements, hoping the “Microsoft” name will lead potential buyers to think “business.”

This leads us thusly to the following questions: Who will buy this new 128 GB iPad and why?

It’s hard to see this new iPad as anything but proof that Apple is once again skating to where the puck is heading rather than where the puck is right now. In other words, Apple has just taken a huge step towards killing off the slumping PC market (even their own) by giving potential buyers one less reason to buy a new desktop or laptop.

At $899, (or $929 for cellular) the 128 GB iPad is not far off from the entry level 11-inch MacBook Air with 64 GB of flash storage. In fact, the 128 GB iPad might be the cheapest “MacBook” they’ve ever released.

Apple’s press statement announcing this new size (available next Tuesday online and in stores) had its own set of peculiarities, featuring statements from not just Apple execs, but also executives from other companies — companies who use the iPad to do real, everyday, professional-level work.

Apple is clearly cozying up to professionals who are looking for a reason to ditch their laptops and who may be looking to the Surface Pro. It also helps that these tablets will help bring in the types of profits Wall Street has gotten so accustomed to seeing from Cupertino.

It’s an interesting and strategic move, one that shouldn’t surprise anyone who’s been watching Apple for a while, yet always seems to catch us off guard when they happen.

(*Those Apple fans and watchers who care enough to ponder things like a 128 GB iPad. We’re a sad lot.)

Image Credit: Apple

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