With new iPads, Apple shows it can pick up the pace of product launches, analysts say

Apple’s iPad mini launch and other product updates on Tuesday gave a glimpse of how the Cupertino company is adapting to the fast-paced gadget market while maintaining its innovative chops, analysts say.

One of the biggest surprises to come from Tuesday’s downtown San Jose event was Apple’s decision to offer a fourth-generation full-size iPad just seven months after launching the iPad 3.

“It underscores the idea that the market is moving faster than ever before,” said Edward Jones analyst Bill Kreher. “Apple understands the need to improve its speed to market.”

The new more powerful iPad reflects “the nature of product cycles,” said Needham analyst Charles Wolf. “Apple did not promise it would only introduce one iPad every year,” he said. “The iPad 3 is still terrific.”

The 7.9-inch iPad mini is sure to cut into sales of the larger iPad, analysts said.

“Only Apple has the courage and resources to eat its young,” said Richard Doherty of the Envisioneering Group.

He believes competitors, which already have 7-inch tablets on the market, can’t match the iPad mini. “This is a product that even companies with the resources of Microsoft or Google couldn’t clone in nine months to a year,” Doherty said.

Apple owns about 70 percent of the 10-inch tablet market, which represents about 80 percent of the entire segment, Kreher said. The iPad mini lets Apple go after the other 20 percent of the overall tablet market.

“They decided to go with a premium product as opposed to selling the product at cost,” he said. “They don’t want to be everything to everybody. But they now do have a 7-inch tablet that they believe and we believe is best in class.”

Wolf said the 7.9-inch iPad mini is a perfect “miniaturization” of the 9.5-inch iPad. “The Kindle Fire and Nexus 7 — those products are primitive compared with the iPad,” he said. “The key is all 275,000 iPad apps run on (the mini iPad). It will prove very popular in price-sensitive schools.”

Wall Street seemed disappointed that Apple didn’t drop the price for its $329 iPad mini further. Apple’s stock dipped more than three percent in after-hours trading to $613.26. Kreher believes it’s a good time for investors to buy the company’s stock.

“I don’t think anything has changed in recent weeks in terms of Apple’s story,” he said. “I think this product introduction will lead to strong foot traffic to Apple-owned stores. Maybe they don’t buy new iPads, but it gets them into the store and they may decide to buy another product or two.”

During Tuesday’s presentation, Apple CEO Tim Cook took time to remind the tech world of his company’s ability to provide “innovation that only Apple can deliver.”

Indeed, his engineers have been busy, producing three new iPads in six months as well as a new iPhone, a refresh of the iPod music players and revamp of its line of laptops and the just-announced new super-thin iMac desktop computer.

“I would love to still have Steve Jobs around, but the company is proving it can continue to innovate after he’s gone,” Wolf said.


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