By Daisuke Wakabayashi
Apple Inc. on Thursday unveiled a new, thinner iPad as the
company tries to reignite the tablet's growth.
Apple said pricing for the iPad Air 2 starts at $499 and at $399
for the iPad Mini 3. Orders for the new iPad begin Friday, and
shipping starts next week.
At an event at its headquarters in Cupertino, Calif., Apple also
unveiled an iMac computer with higher-quality resolution and said
its new mobile-payment service, Apple Pay, will roll out Monday and
be supported by more than 500 banks.
Tablet computers are facing an existential question as
technology evolves. Smartphones are growing bigger with larger
screens and more powerful processors, increasingly capable of
handling tasks once earmarked for tablets. Laptops are lighter and
more portable, meeting some of the demand for a lightweight, mobile
computing device.
Apple isn't alone in confronting a sluggish tablet market.
Market researcher Gartner estimates that world-wide tablet unit
shipments will grow 11% in 2014, a sharp deceleration from 55% unit
growth in 2013. By comparison, Gartner says smartphone shipments
will increase 35% this year.
The trends are visible in Apple's own product line, where the
new iPhone 6 Plus comes with a 5.5-inch display, encroaching on the
iPad Mini's 7.9-inch screen.
Apple said Thursday that the latest iPad, dubbed iPad Air 2, Is
18% thinner than iPad Air.
Apple defined the tablet computer market four years ago when it
introduced the iPad, the last major new product released under
then-CEO Steve Jobs. Initial sales were strong, but demand started
to slow last year.
IPad revenue has fallen four of the last five quarters. Last
year, Apple introduced the thinner iPad Air with a 9.7-inch screen
and added a higher-resolution display to the smaller iPad Mini.
Based on the leaked images, Apple appears to have added a Touch ID
fingerprint reader to its two main iPads.
Part of the problem is that iPad owners aren't replacing tablets
as often as they swap phones. According to Kantar Worldpanel
Comtech data, nearly 50% of iPads in use are the original iPad and
the iPad 2--which were introduced in 2010 and 2011,
respectively.
Apple Chief Executive Tim Cook has largely brushed off concerns
about iPad sales--noting that customers are very satisfied with the
product and iPad owners use the device frequently to browse the Web
and make e-commerce purchases.
Apple is preparing a larger 12.9-inch iPad with a
high-resolution display, according to people familiar with the
matter. Apple had planned to start production of the new iPad this
year, but it has pushed back the timetable to give suppliers more
time to meet massive demand for its new iPhones.
A bigger iPad is expected to be part of Apple's push to position
its tablet computer as the main workplace computing device for a
new generation of workers. In July, it struck a partnership with
International Busniness Machines Corp. to develop mobile
applications targeted at different industries. Under the
partnership, IBM also plans to sell iPhones and iPads to its
corporate clients.
Apple Pay, meanwhile, is aimed at helping shoppers ditch their
wallet and make purchases with an iPhone. The system relies on a
technology known as near-field communication, or NFC, that has had
trouble winning acceptance from merchants.
Merchants must install a reader at their checkout line for
so-called tap-and-go payments. NFC readers are being used by fewer
than 10% of merchants, according to Gartner analyst Mark Hung.
Apple has said iPhone owners will be able to use Apple Pay at
220,000 U.S. locations, including McDonald's Corp., Bloomingdale's
and Macy's. By comparison, the Electronic Transactions Association
said more than nine million U.S. merchants accept credit and debit
cards.
Apple also showed off its new operating system for Macs, the OS
X Yosemite, which will be available today for free, and the company
said its new mobile operating system, iOS 8.1, will be available
Monday.
Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com
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