Apple’s new iPads meet two of three goals for the company

Apple today announced new iPads, an iMac with a Retina Display, and a new Mac Mini, as well as providing more details on OS X Yosemite and iOS 8.1. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan may be reached for further comment at or (408) 744-6244.

Apple had three jobs to do with its iPad announcements today: convincing people who own an iPad 2 or 3 to upgrade to a newer model, winning over new customers to the iPad, and convincing people who own an iPad but have stopped using it to buy a new one and start using it again. It achieved two of those three objectives with its announcements. The new iPads are a significant upgrade over iPads that are two or three years old, which is the main target base for upgrades. They’re thinner, lighter, much more powerful, with better cameras and a Touch ID sensor, and as such anyone upgrading from a two- or three-year old iPad will notice a major improvement in performance. About 3-5% of Apple’s iPad base upgrades every quarter, and these improvements together with the lower prices on the older iPad Minis may increase that number a little.

Apple also extended the bottom end of the iPad range down to $250 for the original iPad Mini, meaning that it now has a range of iPads that run the gamut from $250 to around $1000 – there’s something for almost everyone here. And with last year’s iPad Mini at $300, the entry point for a very good iPad is now lower than it’s ever been. Apple adds about eight to ten million new iPad customers each quarter, and the new iPads should help keep that momentum going, while expanding the addressable market somewhat at the bottom end.

However, there was nothing in today’s announcements which would convince someone who’s stopped using an existing iPad to buy a new one – the new iPads do the same things better, but don’t do anything dramatically new and different. For people who have found a large smartphone and a laptop sufficient, the new iPads won’t change the equation. One other interesting note is that, having effectively achieved parity between the iPad Mini and iPad Air last year, Apple has again opened up a gap between the two in terms of performance. While the iPad got thinner, gained a new, more powerful processor and a better camera, the iPad Mini remained largely unchanged except for the Touch ID sensor and software improvements. The iPad Mini is now again clearly the poorer of the two devices, and the $100 price difference between the iPad Mini 3 and iPad Mini 2 is somewhat hard to justify.

The iMac with Retina Display checks an important box for Apple’s community of creative professionals such as photographers, videographers and designers who need a higher-resolution display to do their work on a Mac. This is a marginal business in the grand scheme of things for Apple, but it’s an important segment for Apple to keep happy. That base is still waiting for a display peripheral with the same high resolution to use with the company’s new Mac Pro which launched last year, so that needs to be high on Apple’s to-do list for the near future.

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