Apple Launches A Market Disruptor Yet Again

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March 8, 2012

Apple launched its next-gen tablet, the new iPad, yesterday at a San Francisco event. Among the standout features includes a Retina display with 2048×1536 resolution, meaning that the new iPad has 1 million more pixels than a 1080p HDTV. Further, the device packs a dual-core CPU, a quad-core A5X graphics processor, LTE support, worldwide 3G support, and 10-hour battery life (nine hours on 4G). I expect that these upgrades will undoubtedly be enough to attract consumers and enterprises alike and further consolidate Apple’s resounding tablet market leadership globally.

So what will be the impact of the new iPad on the rapidly evolving telecom industry? I believe it will disrupt the market due to the following:

  • The As will rule the tablet market. The tablet market is moving towards a likely duopoly between Apple and Amazon due to their aggressive pricing strategies. Through Kindle Fire, Amazon has wiped out the competition in the sub-$199 price range while with the new iPad, Apple will knock out competitors starting from $499 upwards. Moreover, as iPad 2 will coexist alongside the latest incarnation and Apple will slash iPad 2 prices to $399, it reduces the market play of other OEMs such as Samsung even further.
  • There are rough seas ahead for PC manufacturers. During the event yesterday, Apple proclaimed that it sold more iPads in Q4 2011 than any other PC manufacturer sold PCs. The company talked a lot about the post-PC era;” the new iPad will only catalyze this trend. Apple’s vision seems to have also found an unlikely ally in Microsoft’s ex-tech visionary, Ray Ozzie, who also believes that the world has moved beyond PCs.
  • Good news for telecom equipment manufacturers as 4G networks will roll out faster. Telco spending on 4G network rollout, expansion, and upgrade will increase as service providers will look to cash in on the expected high data ARPUs from the new device. The new iPad comes with an undisclosed data tsunami warning. As a result, offloading and heterogeneous network (HetNet) will gain prominence. 
  • Fragmented Google Android is feeling the heat in the tablet market. Although Android is leading in the smartphone market, it is lagging behind in the tablet market. And this gap in the tablet market will only widen — most prominently in the B2B sector. Further, Apple’s new device will put even more pressure on the upcoming Android 5.0 (aka Jelly Bean), and it will be interesting to see what Google brings to the table to turn its fortunes around.
  • The new iPad is a truly global product. With worldwide 3G support, sales of Apple’s latest device will increase in even those regions where either Apple does not sell directly or sells via a limited number of operators, such as in India. Global 3G roaming will also drive up sales in the enterprise segment.
  • The tablet philosophy is redefined from just content consumption to include content creation. Apple launched new apps that allow creation of professional-quality content. Although apps such as iPhoto and Autodesk’s Sketchbook mostly cater to art and creativity, they will help the overall tablet market to break free of its perceived limitations.
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