Apple (NASDAQ: AAPL) introduced two new iPad tablets, the iPad Air 2 and iPad mini 3, as it seeks to regain momentum in the tablet market and fight back against new phablets and cheaper competing tablets from rivals.
Pre-orders for the new iPad mini 3 and iPad Air 2 start Oct. 17 and the new tablets will start shipping next week. Apple did not name U.S. carrier partners for the new tablets, but if history is any guide, Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), Sprint (NYSE: S), T-Mobile US (NYSE:TMUS), U.S. Cellular (NYSE:USM) and other smaller carriers will likely launch the tablets.
The new iPad Air 2 sports Category 4 LTE with support for theoretical peak speeds of up to 150 Mbps, 20 LTE bands, and faster 802.11ac Wi-Fi with MIMO, with support for theoretical peak speeds of 866 Mbps.
A new feature for Apple's tablet lineup is that the new iPad Air 2 supports Apple's Touch ID fingerprint scanner and Apple Pay, the company's recently announced mobile payments program. However, Phil Schiller, Apple's senior vice president of worldwide marketing, said at the event that the iPad Air 2 can only be used for online payments and not in retail stores.
The iPad Air 2 also sports an anti-reflective coating on the glass, a new A8X 64-bit processor, and an 8-megapixel rear camera that can take videos in 1080p HD. Apple said the 9.7-inch iPad Air 2 is 18 percent thinner than the original iPad Air, which Apple introduced last year. Stacking two iPad Air 2s on top of each other would still be thinner than the original iPad, Apple said.
The 7.9-inch iPad mini 3 will come with a 5-megapixel camera capable of taking HD video and 802.11n Wi-Fi with MIMO, as well as Touch ID.
Regarding Apple Pay, Apple CEO Tim Cook said at the event that since the company announced the program in September it has signed up 500 new banks to support the service, which will go live on Oct 20. Cook also said next month Apple will roll out WatchKit, its software development kit for developers to create apps for the Apple Watch, which is still set to launch sometime in early 2015.
The iPad Air 2 will start at $499 for the 16 GB model with just Wi-Fi, and $629 for the 16 GB model with cellular connectivity. Those prices increase to $599 for the 64 GB model with Wi-Fi and $699 for the 128 GB model with Wi-Fi, and go up to $729 for the 64 GB cellular model and $829 for the 128 GB cellular model.
The new iPad mini 3 will start at $399 with Wi-Fi-only connectivity and 16 GB of storage, $499 for the 64 GB version and $599 for the 128 GB model. The iPad mini with LTE will start at $529 with 16 GB of storage, $629 for the 64 GB model and $729 for the 128 GB cellular version.
As it has in years past, Apple is cutting the price of older tablet models. The older iPad mini 2 will start at $299 with Wi-Fi and the year-old iPad Air will start at $399 with Wi-Fi. The original iPad mini will go for $249.
Apple has been facing slower iPad sales growth recently, and the iPad business is facing challenges not only from phablets (including now its own iPhone 6 Plus), but cheaper Android tablets and laptops. According to research firm IDC, Apple still leads the overall market, but it saw its market share slip year-over-year from 33 percent to 26.9 percent in the second quarter. Rival Samsung Electronics saw its market share fall too, from 18.8 percent to 17.2 percent. Meanwhile, lower-cost rivals Lenovo and Asus gained share.
According to research firm Parks Associates, Apple's share of the U.S. tablet market was 37 percent in the first quarter of the year, down from 46 percent in the first quarter of 2012. According to the survey of 10,000 U.S. broadband households, 16 percent had an Amazon (NASDAQ: AMZN) tablet and 14 percent had a Samsung tablet.
Still, Apple's iPad business is massive. The company revealed at the event that it has sold 225 million iPad units since the first iPad debuted in 2010. Cook said Apple sold more iPads over last 12 months than any top PC maker sold in terms of PCs. Apple sold 13.27 million iPads during the second quarter, generating $5.89 billion in revenue alone.
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