Apple Unveils iPad 2: Is It Enough to Stay Ahead of the Competition?

Apple Inc. unveiled the long-anticipated iPad 2, the follow-on to the company’s successful media tablet introduction of 2010. The new iPad includes a lot of “2’s”, including a dual-core processor, two video cameras, dual UMTS or CDMA 3G protocol support, a pair of new Apple accessories, and two enclosure colors.

The iPad 2 incorporates an updated applications processor, dubbed “A5”, using a dual-core ARM Cortex A9 architecture. The use of multiple processor cores improves overall compute and graphics performance, and the Cortex A9 implementation is expected to offer battery lifespan similar to the first generation media tablet.

A pair of accessories – an HDMI output cable to connect an HDTV at resolutions up to 1080p and a new magnetic screen cover that doubles as a micro fiber cleaner – showed some of the greatest innovation this round. A new iOS release, version 4.3, introduces home media sharing and improved browser JavaScript performance, but left some features – namely Wi-Fi AP mode for mobile hotspots – exclusive to the iPhone 4 smartphone.

Pricing for the new iPad 2 models – three that offer only Wi-Fi connectivity and three more than offer Wi-Fi plus 3G cellular – remains unchanged. The iPad 2 models will support UMTS or CDMA air interface protocols, making it compatible with a wider range of mobile network operators. However, buyers must select which protocol/carrier they prefer at the time of purchase; 3G models will not be capable of changing carriers or roaming to different protocol networks after purchase.

The iPad 2 will be available for US buyers on March 11th, while additional countries (Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Ireland, Hungary, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the UK) will commence shipment on March 25th.

With no price changes and only evolutionary additions to the original iPad’s capabilities, ABI Research expects the original iPad to be phased out quickly. Competitively, the addition of video cameras, a dual-core processor, and HDMI video output keeps iPad 2 in the running with other media tablets. Apple’s content ecosystem and integration with other Apple products remains a point of differentiation for the company.”

In 2010, Apple shipped nearly 14.8 million iPads over the trailing nine months of the year, approximately 85% of all media tablets shipped during the year and a significant increase from the 100,000 units shipped by all vendors during 2009.

With an influx of branded competitors from the PC and mobile handset markets (including ASUS, Dell, HTC, LG, Motorola, RIM, and Samsung), we do not expect Apple to maintain its 2010 share going forward. More than 40 million media tablets are expected to be shipped during 2011. The user experience quality remains a concern as hundreds of low-cost tablet launch this year.

Several questions remain: How will the new iPad attract incremental customers in an increasingly competitive media tablet market? What features has Apple left out that give others a competitive advantage? Is Apple missing the “prosumer” and business professional market with its renewedemphasis on consumer features and style?