By Daisuke Wakabayashi
With its tablet sales slumping, Apple Inc. unveiled new iPads
with incremental improvements that aim to prod companies to replace
older tablets and personal computers.
Apple's iPad Air 2 is 18% thinner than its predecessor, includes
a more powerful processor and graphics engine, and is equipped with
Apple's Touch ID fingerprint reader. Touch ID allows users to buy
items within apps using the Apple Pay payment service, and acts as
a security feature.
Forrester Research analyst J.P. Gownder said the changes may
prove underwhelming for many consumers, but could appeal to
businesses. For example, the screens come with an anti-reflective
coating that promises to make the tablets more useful for field
workers. The new iPads also offer the ability to switch between
different carriers' data plans for cellular connectivity.
"It's a set of logical, incremental improvements," said Mr.
Gownder. "Taken together, they could be the thing that pushes
companies to upgrade their old iPads."
Mr. Gownder said 11.5% of iPads were sold to businesses in 2013.
He estimates that figure will reach nearly 20% in 2018.
Apple in July said it would work with International Business
Machines Corp. to develop apps for the iPhone and iPad catered to
the workplace. On Thursday, Apple Chief Executive Tim Cook said he
expects that those apps would help expand the reach of iPads in the
corporate world.
By positioning the iPad as a PC replacement for a new generation
of workers, Apple aims to answer the existential question facing
tablet computers 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 becoming lighter and more portable, meeting some of the
demand for a lightweight, mobile computing device.
The trends are visible in Apple's own products, where the newly
released iPhone 6 Plus comes with a 5.5-inch display, nearly
encroaching on the iPad Mini's 7.9-inch screen.
The iPad was a runaway success as one of the first tablet
computers in 2010, but demand for the product has started to slow.
IPad revenue has fallen in four of the last five quarters, compared
with the same period a year earlier.
Apple isn't alone in confronting a sluggish tablet market.
Market researcher Gartner estimates that world-wide tablet unit
shipments should expand 11% this year, a deceleration from the 55%
unit growth in 2013. By comparison, Gartner says smartphone
shipments will increase 35% this year.
Part of the problem is that iPad owners aren't replacing tablets
as often as they swap phones. According to Kantar Worldpanel
ComTech survey data, nearly 50% of iPads in use are the original
iPad and the iPad 2--which were introduced in 2010 and 2011,
respectively.
During an event short on surprises at Apple's Cupertino, Calif.,
headquarters on Thursday, Mr. Cook emphasized the positives, saying
Apple had sold 225 million iPads since it was introduced, making it
the fastest-selling Apple product ever.
In an interview, Mr. Cook said he remains "bullish over the long
haul" about the iPad, although he said quarterly sales may continue
to fluctuate. He also said the new iPad Air 2 will drive "an
upgrade cycle" among existing iPad owners.
In addition to the iPad Air 2, Apple also unveiled a new iPad
Mini 3, which also will come with Touch ID, and a new iMac personal
computer.
Apple plans to take orders for the new iPads on Friday and begin
shipments next week. The iPad Air 2 starts at $499, while the iPad
Mini 3 starts at $399.
Apple cut the starting price of its previous iPad Minis to $249
for the original version and $299 for last year's model. Kantar's
research chief Carolina Milanesi said the reduced price would help
Apple compete with lower-priced rivals running Google Inc.'s
Android operating system.
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 its screen
suppliers more time to meet massive demand for its new iPhones.
The new iMac, which features a display that Apple says provides
seven times the resolution of a high-definition television, is
available now. The company said Apple Pay rolls out on Monday along
with a new version of its iOS mobile operating system.
Apple has said iPhone owners will be able to use Apple Pay at
220,000 U.S. locations, including McDonald's, Bloomingdale's and
Macy's. By comparison, there are more than nine million U.S.
merchants accepting credit and debit cards. Apple said it expects
Apple Pay to be supported by more than 500 banks by early 2015.
Apple also showed off its new OS X operating system for Macs,
which became available free to existing customers on Thursday; 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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