Enterprise to Apple: Forget the new iPad, the iPad 2 will do

Enterprise to Apple: Forget the new iPad, the iPad 2 will do

Summary: Apple's new iPad offers plenty for the consumer and the ordinary user, but leaves little wiggle-room for business and enterprises.

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Apple's worst kept secret in recent years is finally out of the bag. The Cupertino-based technology announced this morning the next version of its popular tablet, the new iPad.

For consumers, their prayers have been answered as Apple finally bridged what it accomplished in the iPhone 4S and brought it to its larger tablet cousin. The new iPad will be a big hit with consumers, and has an equally big chance of scoring with the enterprise.

Business however has the chance to take the iPad 2 by its horns and exploit its capabilities in the enterprise environment, at lower costs and with greater employee satisfaction. The new price for the iPad 2 (16GB, Wi-Fi) is $399.

But besides the hardware improvements and the addition of features that levels up the tablet to the iPhone 4S, Apple is going for the consumer vote with the new iPad. At the same time, it is taking advantage of the iPad 2's current consumer base and solid product design in order to begin to infiltrate the enterprise market through an attractive, slimline product and even more attractive price tag.

The jump from the original iPad to the iPad 2 gave us a thinner design and two cameras --- with front and back capabilities. Apple has done what it did with the iPhone 4S and keeps vastly the same shape, design, and functionality, whilst upgrading some of the innards to bring it in line with today's expected specifications in the consumer market.

The iPhone 4S was initially seen as a disappointment, but its sales figures soon showed exactly how popular the device was.

Apple has made it clear that by upgrading its iPad line to match and beat its smaller, cheaper, open-sourced rivals, it is firmly putting its foot down and claiming victory over all recent and upcoming competing products.

Yet despite its initial logistical difficulties, the iPad as a device has massively disrupted the PC market. People are opting for the iPad over the vast majority of other tablets on the market, for work and for entertainment. Whatever Apple has done, the iPad has brought it.

Forrester said that pricing isn't the only factor in the tablet race, nor is it the primary one. It's the fact that users simply don't think they need one. With Apple's current share just shy of the 60 percent mark after selling over 55 million iPads to date, the iPad has created what was a non-existent market before the Apple tablet was released. It all but killed the netbook market, and Apple's shift towards the MacBook Air design over the MacBook Pro has spurred on an entirely new ‘ultrabook' category of laptops.

Yet pricing does matter. It does not matter as much to consumers, but pricing is everything for tightly-stretched IT budgets. A $100 price break on the iPad 2 could rack up to tens or hundreds of thousands in costs saved.

People clearly don't want tablets. They want iPads. But the laptop scene will still be a very difficult market to disrupt. Tablets --- and the iPad is the only one that has continued promise --- enable business scenarios that aren't possible with notebooks.

Businesses and enterprises have a different set of priorities, and the new iPad has little business appeal to spur on enterprise growth. However, in a rapid and wider cultural shift towards mobile working, the announcement of an iPad 2 tablet could be considered a subtle move by Apple to exploit the corporate market.

The internal storage is vital for consumers who want to download applications and store vast quantities of music and video content. The 16GB device is more than capable of storing enterprise applications that just need to run a line of business or productivity applications.

Forrester's Ted Schadler writes on ZDNet: "With 11 percent of employees globally using tablets today, developers have powerful incentives to port business apps to touchscreen tablets. Already developers have built 200,000 apps for iPad. With a faster network connection and more power in the touchscreen interface, the new iPad can take on more business workloads: graphics, video, browser apps."

It gives the business user a chance to tempt and jump in to the Apple ecosystem without getting its feet too wet, in the hope that it can hook, line and sinker in an audience it has yet to captivate. In the same manner that Apple has begun working with schools and colleges across the U.S. to offer bulk-purchasing of their tablet devices, by producing a more affordable alternative to higher-specification models, the company may be working on longer-term goals in order to harness next-generation consumer markets.

It may also be worth noting that the enterprise continues its long-standing tradition of buying older, tried and tested technology, whilst holding off the new. Apple has offered an olive branch to businesses to entice them in, while still showing off the new and improved as something to aspire towards. Just look at Windows XP's persistence on enterprise networks.

For restricted IT budgets and the ongoing great outsourcing movement, which is still taking place, it makes cheaper tablets a more viable option. Let's face it: a Retina display, a better camera, improved processing speeds, and 4G LTE technology may fly with ordinary users, but it does not give the enterprise enough push to upgrade or even shell out potentially millions for surface aesthetic features.

An expensive product will not be seen as feasible as a cheaper model. The quality may be higher, and the experience may be better. But in terms of realistic business practices, if a device holds the basic capabilities required for employee efficiency and data access, then profit margins will dictate a move towards the less expensive alternative.

If Apple is considering bulk-purchasing deals with corporate clients on a wider-scale, then the announcement of the 16GB iPad 2 model makes logistical and financial sense. Whereas the new iPad is designed to keep consumers happy --- and loyal --- on a short-term basis, the 16GB iPad 2 could be considered part of Apple's longer-term plans.

The very worst that will come from today is that while Android tablets and QNX-based BlackBerry tablets are dead in the water compared to Apple's three iterations of its iPad tablet, the enterprise will still feel as 'warm' as it does about the new iPad predecessor, and its original form.

But Apple will ultimately win. Apple has created its own tablet segment in the market where low-end tablets compete with each other, and the iPad reigns over them all.

Clever, Apple.

Related:

Topics: CXO, Collaboration, Data Centers, Enterprise Software, iPad, Mobility, Software

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16 comments
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  • Craig

    What about if you could install Office on it? Would that make a difference to Enterprise. Clearly Microsoft think so, it's their key angle.
    craigvn@...
  • I dunno...

    I think keeping the iPad 2 around is going to hurt the iPad 3...

    With the iPad 3, sure you got 4 GPU cores but that is needed to power that 4 fold increase in Pixel Density. Will the display look better? sure but, how many people will care.

    The iSight Camera? The majority of people will never use their camera on the iPad or any other tablet for that matter...

    Overall, people are left with the option of a lesser priced tablet that appears just as swift as the new one and they save $100 to boot!

    As for the 3G or 4G stuff, that really depends on people as most that I knew never bought the 3G model let alone a 4G.

    In short, I can see Businesses turning this away as it didn't deliver anything revolutionary that would make their business that much more productive.
    slickjim
    • I disagree . . .

      In terms of iPhones, Apple still makes the 3GS and 4 and those have not cannibalised sales of the 4S. I expect that selling an iPad 2 along with an iPad 3 is more likely to affect the Android market; not the iPad 3 market.

      BTW, do you realise the Apple will only continue to make the two 16Gig versions of the iPad 2 (wi-fi and 3G) but not the 32Gig and 64Gig versions? A 16Gig iPad 2 will suit some people, but not everyone!
      Wakemewhentrollsgone
      • Hmm

        Do you have something to confirm that?
        slickjim
      • It's been confirmed . . .

        @Peter Perry

        I've read many articles today and it's been stated in a few on different sites - but I do not have time to do a search and find any of those articles. Also, it is somewhat implied about in the third paragraph, which refers only to the 16Gig iPad 2.
        Wakemewhentrollsgone
      • It depends on what you mean by "cannibalized."

        Keeping previous generation iPhones on the market [i]may[/i] have cannibalized iPhone 4S sales, as it was the only #3 smartphone behind iPhone 4 and iPhone 3GS (source: http://www.macrumors.com/2012/02/24/apple-sells-top-3-u-s-smartphone-models-for-all-of-2011/) in that Apple may have sold more 4S handsets had the other two not been around. However, if the 4 and 3GS have better margins, a likely fact considering their long-tail supply chains, then as lower-cost, higher-value alternatives to a 4S they serve the [b]very[/b] important function of getting cost-conscious users into the eco-system. Which means that instead of cannibalizing 4S sales older models serve to lower entry barriers to iOS. Surely this the case, as Apple has shown, repeatedly, that it isn't the least bit sentimental about hardware that's outlived it's purpose. It would be irrational to assume the iPad2 isn't intended to do the same.
        matthew_maurice
    • Who cares, Apple gets a sale either way.

      [i]"I think keeping the iPad 2 around is going to hurt the iPad 3... "[/i]

      Right. cause keeping the iPhone 3GS and iPhone 4 around really hurt the latest iPhones. And keeping the iPad 1 around at a reduced price REALLY hurt the iPad 2.

      Do you really think Apple is hurting if the majority of businesses (or schools for instance) continue to go with the second gen iPad instead of the latest gen? It could even be part of their strategy in sealing-up the markets lol. That's why they changed their branding to just "iPad", it doesn't matter, it's a sale which adds to the ever expanding iOS ecosystem.
      dave95.
      • Agreed

        Many who would not pay $599 will pay $399. This is not going to cannibalize, but rather, it will grow the pie.
        Techboy_z
  • Enterprises will primarily use web apps

    Enterprises have custom software and they will not rebuild it for Objective-C. They will use the IPad as a web host. She the memory doesn't matter. Besides, why would they put their custom internal software on the App Store? The 16 gig wifi only will be just fine.
    A Gray
    • What?

      Why do they need to put internal, custom software on iTunes? If I understand things correctly, there are ways to install apps without resorting to iTunes. Only today I was looking at the Apple Configurator app that seems to be for that purpose.
      Wakemewhentrollsgone
      • Not iTunes, use Enterprise App Catalog

        Most EMM and MDM Vendors provide an Enterprise App Catalog hosted behind the enterprise firewall where the enterprise can load internal private apps. they stay totally secure and out of the hands of iTunes. The apple configurator has some of this capability as well. The Apple-licensed MDM vendors and Apple's own configurator use all the same iOS APIs. Each vendor then innovates on top of that, some providing more advanced features like automated full lifecycle app mgmt.
        reed_on_the_run
  • Duh?

    Zack: enterprise has been buying iPad's in large numbers for well over a year now. They get discount so the sticker price doesn't matter. Examples:

    SAP: 11,000
    GE Healthcare: 20,000
    United Airlines: 11,000

    These are non-trivial deals.

    FWIW - enterprise doesn't buy the way you are suggesting. If there are features they can readily use in their app landscape then they will buy. It's all about ROI.
    dahowlett
  • StoryDesk

    The hardware is just one piece of the Enterprise puzzle. The software needs to be Enterprise grade as well.

    The iPad2 just became a very viable Enterprise tool for the slightly budget conscious CTO.


    Try StoryDesk. www.storydesk.com
    mgroy
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