Apple (NASDAQ:AAPL), as expected, took the wraps off the second-generation version of its popular iPad tablet, called the iPad 2. AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) will be Apple's U.S. wireless carrier partners for the gadget, which will go on sale March 11.
Apple said it will sell two versions of the iPad 2: One for AT&T and one for Verizon. "The iPad model you purchase is specially configured to work with either AT&T or Verizon--not both," Apple said on its website. "So while you don't have to activate 3G service right away, you should choose your iPad with Wi-Fi + 3G according to the carrier you prefer."
Apple CEO Steve Jobs, on a medical leave from the company, presided over a media event in San Francisco to introduce the iPad 2, and appeared on stage to a standing ovation. "We've been working on this product for a while, and I just didn't want to miss this day," Jobs said. He said that 2011 will be the year of the iPad 2.
Jobs said people scoffed when Apple introduced the original iPad as "magical." Apple has since shipped around 15 million iPads.
"Ask our competitors what they think now," he boasted.
The iPad 2 features several upgrades to the original version, though it will be the same price as the original iPad and will also come in white, "from day one," Jobs said. The Wi-Fi-only versions will retail for $499 for the 16 GB model, $599 for the 32 GB version, and $629 for the 64 GB version. The models with cellular connectivity will go for $629, $729 and $829 for the 16 GB, 32 GB and 64 GB version, respectively. (Apple cut the price of all original iPad models by $100.)
The new iPad features a dual-core A5 processor, which Jobs said will provide nine times the graphics performance of the original iPad. The device also will provide 10 hours of battery life, will run on iOS 4.3, is 33 percent thinner than the original at 8.8 mm, and will have front-facing and rear-facing cameras for capturing video and conducting FaceTime calls. It also sports a gyroscope.
Apple also unveiled two new accessories for the iPad 2. One is an HDMI-out cable that provides output of up to 1080p video and charges the iPad; Apple said that will retail for $39. The company also unveiled a Smart Cover, which Jobs said is not a case, but a cover that snaps onto the iPad via magnets. The Polyurethane cases will go for $39 and leather cases will retail for $69.
Interestingly, Jobs addressed the competition facing the iPad 2, specifically tablets running Google's (NASDAQ:GOOG) Android platform. He took a swipe at the price of Motorola Mobility's (NYSE:MMI) Xoom tablet, which retails for $800 without a contract. He noted that five of the iPad's six price points are less than $799. Additionally, an Apple slide during the presentation said that Apple's tablet competition was "flummoxed" and that Apple has sold more iPad units than all other tablet PCs ever sold.
Apple has sold 14.8 million iPads since debuting the gadget in April, including 7.33 million in its most recent quarter. The iPad contributed $4.6 billion to Apple sales, or 17 percent of its total revenue, in the company's most recent quarter. Jobs also noted at the event that Apple has now shipped 100 million iPhones.
"We've gotten off to an exceptional first year," Jobs said. "We'd like to build on that. What about 2011? Everyone's got a tablet. Will 2011 be the year of the copycat? If we did nothing, maybe a little bit ... probably not."
The new iPad will continue to solidify Apple's stranglehold on the tablet market, according to Forrester Research analyst Sarah Rotman Epps. She said the iPad 2 will claim 80 percent of the U.S. tablet market this year--of the more than 24 million tablets that will be sold to U.S. consumers in 2011, at least 20 million will be iPads.
Despite Apple's headstart--many competitors still have not commercially launched their answers to the iPad--the rest of the market is not standing still. Motorola, Hewlett-Packard, LG, Samsung and Research In Motion are among those planning or selling tablets.
Apple's March 2 event invitation hints at iPad 2
Report: Apple puts iPad 2 into production; AT&T, Verizon to sell it
Apple surges to record revenue, iPhone sales in Q1
Analyst: Apple will dominate expanded tablet market in 2011
Tablet rush could herald changing of the guard in computing space
Strategy Analytics: Challenging Apple, Android seizes 21.6% of global tablet market in Q4