I get the impression that a majority of the Wall Street commentariat—even many of those who are Apple-friendly—don’t really “get” Apple and its products, and tend to view the IT world from a predominantly Windows/Android-centric perspective.
For example, Seeking Alpha blogger Piyush Arora this week posted a commentary titled “iPad Pro Won’t Be A Surface Pro Killer.”
I agree with most of Mr. Arora’s observations and deductions regarding a rumored 12.9-inch iPad, but had to smile at his several references to such a machine, should it turn out to be a reality, not having the juice to “cannibalize Surface Pro sales.”
Now, there’s a topic I’m sure causes Apple CEO Tim Cook loss of sleep…not. In most tablet sales analyses I’ve seen, the Surface Pro only rates a low single-digit percentage market share, if it’s mentioned at all, while the iPad—even in the most recently reported Apple fiscal quarter, which was the second in a row logging negative iPad sales growth—still sold 13.276 million, with revenues in what is traditionally Apple’s weakest quarter of $5,889.000.
Microsoft has famously not released Surface sales metrics, but Surface tablet PC sales did reportedly finally take off in Q2 2014, more than doubling from $400 million during Q1, to $893 million during the year’s second calendar quarter. Apple still made more than six times off iPads what Microsoft realized from Surface tablets.
Piyush Arora is a very smart guy—an electronics engineer with an MBA in Finance, and he may be right that a 13-inch ARM-powered iPad Pro running the iOS won’t be a Surface Pro killer. But if it isn’t, is that really important? The Surface Pro is really more of a hybrid ultrabook than a tablet computer, and with its Intel Core i processor and running the full desktop version of Windows 8 .1, it’s more a competitor to the MacBook Air than the iPad—even the possible iPad Pro.
That said, I certainly don’t disagree that the current iPad has an array of shortcomings as a work platform for efficiency oriented business users and content creators. The iPad is an indisputably excellent content consumption device, but Apple has doggedly resisted budging from its extreme minimalist user-simplicity paradigm, stubbornly stonewalling calls from productivity-oriented users to address the deficiencies such as lack of multitasking, non-support of multiple windowing, no user access to the file directory, no support for mouse input (even Steve Jobs affirmed that touchscreens in vertical orientation are an ergonomic horror), no multiple user accounts, no standard data I/O port, no expansion card slot,the inability save as or print from PDF documents, and no counterpart to OS X’s Preview app, to name a few. The absence of these frustrates users who try to do serious work on the iPad.
Mr. Arora’s Seeking Alpha blogger colleague Scott Tzu of Orange Peel Investments suggests that with the first fruits of the Apple/IBM deal probably a year or so away, Apple could in the meantime boost the iPad’s enterprise cred by bundling the iPad Air with Apple’s Wireless keyboard, which he observes would not only provide users with the opportunity go with pure tablet mode, but also to set up as a very portable PC workstation. This would give the impression that the tablet has been made specifically to be able to get office-style work done among the group of customers with which Mr. Tzu thinks Apple has the most opportunity for iPad sales growth.
He maintains that one of the reasons that Microsoft’s Surface has been successful is because it has blurred the boundaries between laptop and tablet, while Apple has always leaned the other way with the iPad, which blurs the lines between tablet and phone. I don’t disagree with the observation about respective emphases, but while the Surface Pro is now a modest success, it’s still selling at only a fraction of the unit volume and profitability of the iPad. Apple quite prudently doesn’t want to do anything to mess up what has been a spectacularly successful formula.
Apple can’t rest on the iPad’s laurels, but I don’t think just aping Microsoft’s strategy and building a tablet running a touchscreen port of the iOS powered by Intel Core i silicon is the way to proceed. I like OS X a lot better than I do the iOS, and it’s definitely a better platform for doing serious work on a laptop or desktop. But its angularities notwithstanding, the iOS is a better tablet OS. The software is getting better all the time, and you can even get Microsoft Office for the iPad. I’m also leaving aside for now persistent rumors that Apple will at some point port OS X to ARM and drop Intel CPUs on Macs as well as iDevices. We’ll see. I find it hard to imagine Apple dumping Intel x86 support entirely, but consumer level Macs with ARM silicon and a port of OS X to ARM are not implausible.
In the meantime, I agree with Seeking Alpha’s Mark Hibben who points to Lenovo’s Thinkpad 10, rather than Surface Pro, as the iPad’s main challenger. The Thinkpad 10 strongly contributed to Lenovo’s 67% year-over-year tablet sales gain at the same time iPad sales have been slumping. Unlike with the Core i powered Surface Pro, the ThinkPad 10 runs Intel’s heavily subsidized Bay Trail Atom processor, allowing Lenovo to substantially undercut Apple in price.
For $619, you get an Intel Atom Z3795 Processor with 4GB system RAM, 128GB data storage, and a 64bit Windows 8.1 Bing OS. There’s also an 8 megapixel rear-facing camera (to the iPad Air’s 5 MP unit (although pixel resolution is not necessarily a certain indicator of picture quality)). In I/O connectivity, you get Micro HDMI and standard USB 2.0 I/O ports, and a Micro SD card slot, none of which are available on the iPad; and Windows of course supports multi-windowing and user access to the file system.
ThinkPad 10 has a slightly larger, but lower resolution, 10.1-inch, 1,920 x 1,100 touchscreen than the iPad Air’s 9.7-inch 2,048 x 1,536 res Retina panel. The Lenovo tablet weighs 1.3 lb. to the Air’s one pound even, and is 8.95 mm thick, compared with the iPad’s slimmer 7.5 mm.
The ThinkPad 10, like the iPad, is a true tablet and not a convertible laptop hybrid, but it is offered with an optional ($119.99) nicely integrated, thin, mechanical Ultrabook Keyboard that connects via a custom hinge—a much more elegant solution than Apple’s relatively clumsy and unintegrated optional Bluetooth external keyboard. Even cooler, IMHO, is the keyboard’s built-in glass trackpad, and of course it supports a regular mouse or other pointing devices via USB.
I don’t really want an OS X tablet running Core i CPUs, but Lenovo ThinkPad 10 has pretty much the feature set I would love to see made available on the iPad, and that’s the formula I would urge Apple to follow for the iPad Pro. I would certainly find it hard to resist. It still wouldn’t be enough to completely displace my laptops, but my guess is that it would persuade a lot of folks that it’s all they really need, offering a much slicker, albeit less powerful tablet experience than a Surface Pro.