Apple has introduced its latest tablets: the iPad Air and the iPad mini Retina. The iPad Air will be available on November 1st, with the new mini available "later in November." The new mini will be priced at $399 for the 16GB, Wi-Fi version. The 9.7-inch iPad Air will list at $499 for the equivalent model. The original iPad mini will stay in the product lineup at $299, along with the iPad 2, which remains at $399. 

Both new tablets incorporate the new A7 chip, providing 64-bit architecture, and the M7 motion coprocessor for improved power management and motion control. The new mini includes a 2,048 x 1,536 IPS Retina display, the same pixel format as the iPad Air. That resolution on the 7.9-inch mini translates to a pixel density of 324 pixels per inch (PPI) compared to 264 PPI on the iPad Air. Apple also expanded the LTE bands, allowing for more cellular carriers, and boosted the Wi-Fi performance with the inclusion of MIMO (Multiple In Multiple Out). 

The flagship, 9.7 inch iPad Air is also lighter than its predecessor at one pound and 20 per cent thinner, with 43 per cent narrower bezels, reducing the overall product footprint. 

In addition to the hardware changes, Apple launched updated versions of its iLife and iWorks applications, both available for free now on the iPad. 

Over the past year Android competitors have flooded the market with low-cost alternatives, chipping away at the iPad's share of shipments but 3.5 years Apple's tablet remains the market leager. Having successfully decimated the netbook market, the new iPads, with their more powerful chipsets and free productivity software applications, widen the playing field to directly challenge the PC, while further distancing the iPad from its Android competitors. 

  • The average tablet price point in the Android market is now skimming the $200 barrier, as sub-$100, 7.x-inch tablets from China capture an increasing share of the market. Established Android leaders, including Samsung, Asus, and Amazon, are taking a higher road, with more feature rich offerings but the overall price trend in Android tablets is down. Rather than slashing or maintaining price on its new Mini, Apple positioned it at $399 with a design and performance package to support the price. This is consistent with Apple's core philosophy of valuing design improvements over decreasing prices year on year. Apple will likely continue to lose share of shipments in the overall tablet market but IHS expects it will continue to own the all-important premium market.
  • The iPad Air upgrade will revitalize the 9.7-inch category, which has languished over the past year as the mini has captured the public's attention and more than half of the iPad sales. The lighter, smaller design narrows the weight and size differentials between the air and the mini while the increased emphasis on productivity applications underscores the use case for the additional screen area and better positions the product as a notebook replacement, rather than an adjunct to a PC. With Microsoft already committed to bringing Office to the iPad the productivity focus will only increase, putting the lie to the argument that the iPad cannot replace a PC.
  • By drawing comparisons on the performance side with the first generation iPad - graphic performance that is 72 times faster than the original - Apple makes a strong upgrade pitch to the remaining installed diehard base of iPad 1 users still out there while also highlighting the progression of the product line.
  • The new mini with Retina display is not slated to appear until "later in November." Supply on this product is going to be severely constrained, due to production issues with the new Retina LCD panel. IHS forecasts a staggered launch approach with initial availability likely limited to a few key regions. The 2,048 x 1,536 display on the Retina Mini, the same pixel format as that of the iPad Air, costs substantially more than the 1,024 x 768 version in the original Mini contributing to the higher price point of $399. The display improvement alone would not have justified the higher price point but the combination of the Retina display, 64-bit processor, applications, design, overall performance, and access to Apple's rich ecosystem will capture plenty of followers. IHS expects the lines around the Apple stores to reach epic proportions when this product launches.
  • At $170 above the new Nexus 7 and the Kindle Fire HDX 7, each priced at $229 for similar pixel density, the price point of the new mini is likely to be a sticking point for value centric consumers craving entry into the Apple ecosystem. For those customers Apple has an answer, dropping the price point on the existing Mini to $299 and retaining the larger iPad 2 at $399. This is where solid, original design pays dividends, as Apple approaches the 3 year mark on the iPad 2, a product that costs them less to manufacture with each successive quarter. Most personal computers have shorter product lifecycles than 3 years, which makes the iPad 2's longevity shocking. The gamble here is whether the $299 price point on the mini is low enough to pull in a whole new group of end users.

Put it all together and Apple is well positioned for another solid holiday quarter and has set the stage for a strong start to 2014, with 2013 almost certain to end with a slew of backorders while many of its competitors are working to clear post-holiday inventory.

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Apple Inc.
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