Apple’s iPad Pro
Apple (AAPL) is launching its new iPad Pro with a large 12.9-inch display and A9X chip. Philip Schiller, senior vice president of Worldwide Marketing at Apple, said, “iPad Pro is the most advanced and powerful iPad we have ever made.” The company also introduced Apple Pencil and Smart Keyboard to expand the capabilities of iPad Pro.
Apple commented on the Apple Pencil that it’s “a precision input device available for purchase separately, which makes drawing and sketching feel remarkably fluid and natural.” The company also said, “The Smart Keyboard, available for purchase separately, attaches to iPad Pro’s innovative Smart Connector port, eliminating the need for a separate battery, on/off switch or Bluetooth pairing.”
iPad Pro to tap into anticipated growth in large display tablets and two-in-ones
iPad is a shrinking product-line for Apple. iPad revenue continued the declining trend during fiscal 3Q15. It fell ~22.9% year-over-year (or YoY) to reach ~$4.5 billion in the quarter. In fiscal 2Q15 and fiscal 1Q15, iPad sales decreased YoY by ~28.7% and ~21.7%, respectively.
Both unit sales and ASPs (average selling prices) of the iPad dropped YoY in the June quarter. iPad sales in the June quarter dropped ~17.7% YoY. ASPs of iPads decreased by ~6.4% YoY to ~$415 during the quarter.
The new iPad Pro may help Apple ride on the anticipated growth of the large-display tablets and two-in-one products, which include Microsoft (MSFT) Surface Pro 3 and HP (HPQ) Envy x2. According to a report by IDC (International Data Corporation), the tablets, together with two-in-ones with greater than 10-inch displays, are expected to have a bigger market share in the overall tablets and two-in-one category in 2019 compared to the same in 2014.
XLK held ~16.6% in the company on August 31, 2015. SPY held ~3.7% in Apple on the same date.