'Insufficient' innovation leaves iPad vulnerable to ultrathin PCs, says analyst

'Insufficient' innovation leaves iPad vulnerable to ultrathin PCs, says analyst

Summary: Could a lack of innovation leave Apple's flagship tablet vulnerable to new PC form factors such as ultrabook systems? One analyst thinks so.

(Source: Apple)

Apple's lack of innovation with the iPad could leave the door open to new PC form factors such as ultrabook systems, says one analyst.

Citibank analyst Glen Yeung believes that Apple needs to do more than make its flagship tablet lighter, thinner, and faster if it is to not become vulnerable to new classes of PCs.

"We believe Apple will launch an iPad Mini Retina and a thinner/lighter iPad5 (both likely sporting newer processors) in 3Q13 … iPad innovation of this nature is insufficient to reverse share loss," wrote Yeung in a note to clients earlier this week, reports CNET.

"Whereas we see limited innovation in tablets in 2H13, we see growing innovation in PCs. The growing presence of touch-based, ultrathin, all-day notebooks at improving price points (e.g., Intel requires all Haswell-based Ultrabooks to have touch and envisions price-points as low as $599) could create competition for 10" tablets not fully anticipated by the market."

Haswell is a new line of processors that Intel plans to launch in June. They are be built using the same 22-nanometer process and the 3D tri-gate technology as Ivy Bridge chips, but will deliver performance per clock and lower power consumption. This makes them perfect for use in mobile devices powered by a battery.

Given how disruptive the iPad has been to the PC industry, helping—in collaboration with the smartphone and Android-powered tablets—to bring the sector to its knees and send OEMs scrabbling to find new markets, it's hard to see how Windows-powered tablets could gain enough traction to cause sleepless nights over at Apple HQ. That said, the market relies on the fickle nature of consumers, combined with the added enterprise appeal of tablets running full-blown versions of Windows, could be enough to apply a jolt from a set of heart paddles to the industry. 

Note that I did say 'could.'

The PC industry has shown itself to be ether unwilling to unable to fully embrace the fact that people don't want as many desktop and notebooks any more, and are instead spending their money on tablets and smartphones. PC OEMs are finding it hard to keep up with Apple's aggressive yearly upgrade cycle. There are a lot of iPads out there, but the market doesn't seem to be anywhere near saturation yet. But buyers—consumers and enterprise alike—are easily distracted by new shiny things.

(Source: Intel)

We're not expecting the iPad to get a refresh until late this year, so this gives PC OEMs a chance to innovate, but they need to be really fast, and get compelling hardware on shelves for users to buy.

Topics: Apple, Hardware, Intel, iPad, Processors, Tablets

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  • As with all analysts...

    He is wrong. He'll get hits but this time next year his article will be forgotten.
    • Title != conclusing pragraph...

      Was the author talking about Apple's lack of innovation or the PC OEMs'? I think the title of this article does not much the content and the conclusion of the article.

      Therefore, allow me to come to the inevitable conclusion that unless you are ready to withstand the trolls of Apple lovers, you would have to always write an article like this, which would just confuse the reader.

      The fact of the matter is that we may continue to ignore the challenges that Apple is facing, but what we will never be able to evade is that "anyone, who had owned Apple shares since October 2012 had lost over £281.00 per share.

      Anyone who was clever or courageous enough to realise what, in October 2012, came to the public domain would have taken a short position on Apple shares and would have made a profit of $281.00 on each Apple share he/she delivers on 18/02/2013!

      Now the question is what happened during October 2012 that made Apple shares or stocks lost so much value? Just think about the new device in the block that rendered IPad to become IToy. I will use invisible ink her (Surface and other interesting devices from PC makers).

      Please accept my sincere apologies, if the above paragraph angered you, while you are thinking about where we will be by the fall of this year. And think about the reality that this is the time you should be making money out of Apple shares, or you will end up so unhappy by the fall of this year.
      • Correction:

        Title != concluding paragraph... rather than Title != conclusing pragraph...
        • I bought when Apple was selling at 12.00 so I'm good:)

          Pagan jim
          James Quinn
          • 12:00

            What, three hours ago?
      • Disagree != Troll

        Now, I came by later, so the title may have changed. The title I've been seeing is fair, and summarizes analyst Glen Yeung's point, and clearly identifies it as from an analyst.

        While the stock price fluctuations are troubling for those who bought into Apple in Spring 2012, I don't look at stock price as driven by consideration of product marketing beyond conventional wisdom. I have to think about this more, but it seems to me that the biggest stock market successes come out of some people being right when the majority think them wrong. The trick, of course, is that most of the time conventional wisdom is good enough.

        I think Mr. Yeung misses a point, the people who want a notebook in a tablet would buy one or the other. Let's be honest, the Intel processors do a lot more calculations in a second than the ARM processors and necessarily use more power and generate more heat. This makes them awesome for use where there's room to vent the heat, but pose engineering challenges when thin and light and battery life are the primary considerations. Those who started on ARM don't have that problem, yet. So, lacking notebook power, they aim the product at those who don't like a notebook or find a notebook too powerful or too administratively burdensome for the communications computing they do. The latter group seems to hold the potential for growth. In any case Apple and competitors have shown very good growth curves for their tablets and, we note, they do not run Windows, the king of the Intel processor computers. I think Win tablets or, I guess, ultra-thins are more of a problem for Windows OEMs than Apple, especially as, if the functionality is the same, wouldn't the cheap notebook still win in the market?

        Well, people pay Mr. Yeung for his opinion and no one pays me for mine. That's okay with me.
        • Let's wait till...

          ... the fall of 2013.
        • Wrong

          Current title is

          ''Insufficient' innovation leaves iPad vulnerable to ultrathin PCs, says analyst'

          Whereas he clearly said

          IF apple only does X, Y and Z then that WOULD BE insufficient and would leave Apple exposed...

          The latter is a hypothetical situation and conclusion. The title assumes that it has occurred, and therefore wrongly quotes the analyst.
          Henry 3 Dogg
    • Agreed

      There are no signs in the market, either public or private, that potential customers are looking for iPad features in Ultrabooks. The anal-yst is essentially packaging traditional non-tablet fanboisms about power/functionality/features being more important to the consumer. There are no trends that people want more laptops instead of tablets.
      • Do Anyone Understand Markets?

        Tablets are content consumption low tech fun gadgets. Laptops are content creation high tech devices. Two separate markets. Most people have both devices.
        Sean Foley
      • I agree.

        In fact, I'd say that all signs in the market are pointing to laptops following desktops on a slow spiral into niche markets. Most only use things like email, video chat, Internet browsing, and simple games anyway. They can do everything they need with virtually any tablet out there and the batteries on tablets last a lot longer, so why take up valuable space with anything larger? You can carry a tablet everywhere.
  • As an engineer, I got a laugh out of Mr. Yeung's following statement.

    AKH quotes him as saying, " ... believes that Apple needs to do more than make its flagship tablet lighter, thinner, and faster ..."

    Think about that statement for a second: Lighter, thinner, faster - translate that to being more powerful - and (left unstated) at a price point no greater than the previous generation's iPad model.

    From an engineering point of view, those would be great achievements.

    Perhaps Mr. Yeung wishes for a flying iPad from Apple.

    I can think of only one hardware change that MIGHT make sense. In that is the inclusion of a micro SD card slot for any necessary file access not stored in the cloud. But really, Apple's iPad and iCloud synergy is really good. Then there are other cloud storage options available. (I have Skydrive, Dropbox and my Amazon cloud associated with my iOS devices)

    Better to improve iOS to take advantage of multi-core ARM processors than to incorporate a Haswell chipset in an iPad device and try to turn the iPad into a Surface Pro. Apple has that covered with it's MBA and MBP line of laptops.
    • Fair enough

      But most cloud services really don't play nice with iOS, at least not on the level the same services play nice with android, windows, or even desktop linux. iOS needs to open up a bit to let apps take advantage of the platform instead of the other way around.
    • Apple isn't catering to engineers though

      The Ipad is primarily a consumer device and Apple thrives by their ability to encourage users to upgrade to the latest model.

      The article is addressing Apples shrinking market share, or in other words the rapid growing market share that the competition is experiencing. The author of the article is correctly pointing out that stagnation that is setting in on iPads and iOS in general. As nice as they are, slight incremental updates will continue to struggle against a competitive operating system that is showing much more growth, more variety, more features and increasing quality with lowering prices.

      What have been the real big news worthy additions to Apple iDevice the last several years?

      Siri, which is still in beta after 2 years.
      Higher resolution screens
      New screen sizes for iPhone and iPad.
      Apple Maps which showed that even Apple has problems.
      4G LTE support

      People have come to expect the hot new coolness to come from Apple, but that seems to be coming from Android for the last few years. Almost hand in hand with their market share rise.

      The author makes some very valid points. Apple isn't going to die, but Apple can't coast along on its name either.

      I suspect Apple is up to something big. What I don't know, maybe iOS/OSx intergration or budget models? What I do believe is that if Apple releases new models this year that don't have anything exciting they will start to see a significant decline.
      • not what Kenosha77a said

        His point was that thinner, lighter, faster - in computers is what any one engineer could only dream to achieve. Add "at the same low price" and you begin to understand that Apple does not sit still and seriously improves the product.

        Of course, there are plenty of things, besides those, that Apple could do to the iPad. But the important question is: is there demand? Is there any real benefit from those "new" things? If it's only for the wow factor, many will instead prefer Apple focus on the "dull" thinner, lighter, faster... There is room for much improvement in tablets.
        • I understood what Kenosha said.

          And it is correct from the vantage of an engineer. Smaller, lighter and faster are impressive technical achievements for devices such as the iPad... yet it isn't exactly the focus of the article nor what will counter the incredible growth that Android is seeing or thwart any gains Windows might be able to scratch out.

          To your point, I think you are wrong about Apple sitting still. 2 years ago Apple was the undistputed leader of phone/tablet market. That is certainly not the case anymore. Several phones are getting top honors over the iPhone and other tablets are seen as viable choices that Android is taking majority of that marketshare as well.

          Apple let Android devices steal the market of screens bigger than 3.5 inchs as well as tablets smaller than 9.7. That is the very definition of sitting still as the competition beat them to the market.

          This is not me saying Apple is doomed, but their lack of innovation over the last several years has not only allowed the competition to get a good foothold, but to actually steal the mantle of leadership from iDevices.

          Maybe I am wrong, but I can't list the "oh and one more thing" moments that Steve Jobs would deliver that made people feel they wanted an iDevice. All of that is coming from Android at least 12 months before Apple decides it is a good feature to have.
        • Doesn't cut it

          Thinner, lighter, faster, same price is always a good iterative direction.

          But it is not an achievement that typically drove Apple growth. That was "that android thing" where many Apple supports turned up their nose at the spec race.

          Apple's incredible margins and profitability are predicated on continual major innovations. The last thing that qualified was Siri with an honorable mention to Retina iPad and MBP. That's it.

          Meanwhile the competition has largely caught up.

          It's not that the stockmarket thinks Apple is doomed, just that, if it is no longer innovating, its profit will come down out of the clouds and more resemble that of traditional tech companies. And there have been no fun rumors that would indicate they have something up their sleeve besides more Apple TV which hasn't set the world on fire.

          Yeung is spot on.
    • @kenoshua77a

      You missed the whole point the article was making. It did not suggest anywhere that an iPad should implement a Haswell chipset. The article suggested that making a device thinner and lighter with a higher-resolution screen is not enough for what people want/expect now. People want a device with more capabilities. The iPad is already thin and light enough and its screen is high enough resolution. How about giving this toy some real computer capabilities?

      "If" the Surface Pro catches on (that's a big if!) people will expect similar capabilities from an Pad, or simply purchase a Surface Pro. I don't care if you are from the Apple camp or the Microsoft camp, you can't tell me an iPad is a worthy alternative to a Surface Pro. You made reference to MBA and MBP line of laptops...but that is no solution to someone specifically wanting a tablet.

      I'd never used an iPad until this weekend (yesterday) when I had the chance to have a mess around with my father's iPad. It just reminded me of why I've never looked back after shifting from iPhone to Android phone; it is so restrictive and cumbersome in ways of transferring files onto the device from a PC, etc. iOS is stale and boring and needs a revamp. I absolutely loved my iPhone way back when, but my brother's iPhone 5 (which I also had a play with yesterday) just reminded me once again how restrictive and frustrating iOS is.

      This was not an Android or Microsoft fanboy response, it was simply an agreement with the article that Apple needs to pull something out of the bag for the iPad to continue its terrific success.
      • Good comment! But I think I better explain the Haswell chip reference.

        I referenced the Haswell chip for two reasons: It was mentioned in the blog article and that it represents a significant performance edge over current iPad AXX chips.

        I was NOT suggesting that Apple should incorporate the Haswell chip set in their tablet lineup. (From rumors and educated guesses, Apple will employ the Haswell chip in their next laptop upgrade cycle.)

        What I WAS suggesting is that the Citibank analyst Glen Yeung feels that Apple needs to incorporate the Haswell chip set (or a chip set that is it's equivalent) into the iPad in order to transform the iPad into a product similar to the Surface Pro.

        I'm not going to tell Apple what to do. (They are doing quite fine without my advice - in fact - it has been Apple's policy to NOT take suggestions from consumer comments. I suspect that this Apple policy is based more on legal issues - copy rights and so ons - than anything else) But I digress.

        I suspect that from Mr. Yeung's point of view, he feels that tablets are quickly becoming a commodity item (much like Coca-Cola and Pesi Cola are commodity beverage products) and, as such, he fears that Apple's investors might be left "holding the iPad bag, so to speak" if the iPad tablet experience is not transformed into something else.

        Mr. Yeung is a "dollars and cents" guy. He has trouble seeing how incremental but significant hardware improvements to Apple's iPad tablets can stem the tide of obsolescence and continue to reinforce Apple's impressive iOS app/iPad user experience. (How many pundits labeled the Retina display as just a so-so incremental hardware advancement when it was first introduced. And how many pundits now would view retina class displays as a mandatory tablet product feature?)

        But, if I interpret Mr. Yeung's motives correctly, he does make a fair point. And that is, only a constantly improving iPad with more and more features added can safeguard investor funds.

        But Apple's culture - if it stays true to SJ's vision - is a culture unafraid of technological change. Tim Cook has already gone on record as saying product cannibalism - as long as that process only affects their own Apple products - should be viewed as a normal business model. Another way of stating that principle is being unafraid to forsake a product line if technology offers a different - better path to doing things. (Examples: The iPhone has cannibalized iPod sales. So what? The iPad has cannibalized MacBook sales. So what? The iMac has cannibalized Mac Pro sales. So what?) Something will cannibalize iPad sales in the future. So what?

        There will be other products that will take the place of iPad functions in the future. Until that day happens, however, software and hardware engineering improvements to the iPad tablets should be sufficient, IMO, to maintain Apple's tablet position in the world market place.
    • Improving iOS

      you hit the nail on the head there. That is the weakness at the moment. It hasn't significantly advanced since it was released in 2007, in terms of UI. It is starting to feel old. They have tacked on limited multi-tasking and the notification drop-down from Android, but it is still essentially the same beast.

      In the meantime, Windows has gone past the iPad in many was, as has Android.

      But one of the biggest gains, with Windows 8, is the tablet as desktop. With the iPad, you have your apps on the iPad and, when you get to work, you have other applications on your desktop.

      With Windows 8 Ultrabook or tablets and a decent dock, you have the same apps and applications, whether you are on the move or at your desk. You have access to everything you need, wherever you are. The desktop applications might be a little hard to use, compared to tablet oriented apps on the tablet screen, but you still have access when you are away from the desk. Plug the tablet into a 24" monitor, keyboard and mouse and you have a fully functional desktop experience and those apps with the data you captured on the move are "local", you can simply copy and paste into the desktop environment.

      I am currently looking at a Windows 8 tablet in exactly this scenario. I can carry it to meetings and take notes on it, but when I get back to my desk and plug it into the dock, I have a full desktop to write up my notes on, without having to sync everything to the cloud first or worry about file formats.

      That is a lot more flexible than an iPad, if you are stuck with having to use Windows based applications for productivity - which a lot of corporates are.

      If you live 100% in the cloud or don't need "full power" desktop applications, the iPad has some advantages, but if you still need Windows, why spend money on 2 devices?