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Supply Chain Sources Say Apple to Release iPad 2 in February

Thank goodness for supply chain folks. Without them we might not have known {complink 379|Apple Inc.} plans to begin mass production of the next-generation iPad in January. DigiTimes cites unnamed supply chain sources from Taiwan-based components makers. If true, the planned leak that came from within Asian countries could mean new iPads will be in the hands of consumers by February.

{complink 2125|Foxconn Electronics Inc.}, the subsidiary of Hon Hai, in Shenzhen, China, reportedly will manufacture between 400,000 and 600,000 units. It's rumored to have two cameras: one forward-facing to support Apple's FaceTime video chat, and one rear-facing for photo taking. Citing a research note from Detweiler Fenton, Barron's reported in October that {complink 12874|OmniVision Technologies Inc.} will supply CMOS image sensors. It makes sense that the second generation of the iPad would have at least one camera, as does the iPhone.

Could the iPad become the new portable device in manufacturing plants, replacing laptops or mobile phones to monitor supply chains and access information in the cloud?

Apple sold about 4.2 million iPads in the company's fiscal fourth quarter, falling short of industry expectations. Analysts, however, expect iPad sales to increase during the holidays. And since the iPhone can edit video, think what you can do on an iPad. Well, that's if you use it for anything other than watching movies.

As for me, the first version of the iPad sits in the nightstand drawer until I use it to download a movie from iTunes and watch it in bed. {complink 7137|Piper Jaffray & Co.} senior research analyst Gene Munster expects 70.8 million tablet units to sell in 2012, up from 14.5 million units this year. While Apple controls about 90 percent of the market today, look for tablets from {complink 4751|Samsung Electronics Co. Ltd.}, {complink 3538|Motorola Inc.}, and {complink 2387|High Tech Computer Corp. (HTC)} in the coming year.

The components industry will see slightly slower growth next year, but smartphones, mobile PCs, and media tablets will fuel semiconductor growth worldwide through 2014, according to {complink 7426|Gartner Inc.} The research firm projects semiconductor revenue from media tablets similar to the iPad will grow from $2.4 billion in 2010 to $17.8 billion in 2014.

Reports also suggest the second generation of the iPad will be lighter and thinner. The details are still sketchy, but if anyone can weight in, anonymously or not, on the features and delivery date, I'm sure readers and brands would like to know. After all, Apple's iAd network that supports advertising on devices like the iPad has become a major forethought, rather than afterthought, for the ad industry. {complink 6518|Yahoo Inc.} and others have begun to design creative pieces specifically for ads that serve up on the iPad.

Anyone have any insight? Do you own an iPad or use one at work?

23 comments on “Supply Chain Sources Say Apple to Release iPad 2 in February

  1. Taimoor Zubar
    December 13, 2010

    As Apple sets it's second foot in the Tablet PC market, it would face a different situation than the one it faced when iPad was first launched. Since then, a lot of other companies have come up with competitive products. HP has come up with it's HP Slate 500 which is a great tablet solution for Windows users. In the Android world, Samsung has stepped up with it's Samsung Galaxy Tab which is both sleek and affordable. Dell is also in the market with it's Dell Streak, a smaller hybrid version of a tablet and touch-phone. I believe Apple will face tougher competition this time as it proceeds to launch iPad 2.

  2. Laurie Sullivan
    December 13, 2010

    Good point Taimoorz. Apple certainly has more competition now, compared with the original launch of the iPad. Do you think companies first to market continually dominate the space? What does it take for a newcomer to overtake the leader, especially in this case? Can anyone shed light on Apple's supply chain strategy? 

  3. Taimoor Zubar
    December 13, 2010

    I believe the 'first-mover advantage' cannot last forever. If a market is attractive, other competitors will spring up, just as they have in the tablet market. But they cannot merely come up with exactly the same product as Apple's. They need to compete either on price or features. It may be difficult to beat Apple in terms of features, but a low-priced product that offer the same features may well capture significant market-share. On the other hand, if Apple wants to be successful with the second launch, it also needs to make sure that iPad 2 stands out in terms of its features and design.

  4. stochastic excursion
    December 13, 2010

    The market for next-generation computing devices looks strong.  The first-on-the-block consumers of cell phones and tablets will make this innovation pay off, I think. 

    OTOH fast-movers in the business force the product cycle for first-movers to be shorter than in recent decades.  The growing number of players in the fast-mover category have made it crowded and more competitive. 

  5. AnalyzeThis
    December 13, 2010

    Yes, obviously Apple was the first major player in the tablet market (well, for this generation of tablets, at least), but I don't think this is an issue of the first to market being the most likely to dominate the space: I think Apple's success in this space has more to do with the loyalty of consumers to the Apple brand and the appeal of the Apple “experience.”

    Apple certainly wasn't the first to enter the smartphone market (in fact they were very late to throw their hat into the ring), but it didn't really matter. They obviously provided a unique product in the iPhone which has been very, very successful.

    Yes, Apple now faces more competition in the tablet space, also there's a question of market saturation: obviously people who really desire a tablet have probably already purchased one, so is it really likely that the iPad 2 will be as successful as Apple thinks? Will most existing iPad owners update? Sure, the fanatics will, but the majority have already made too big of an investment. Updating to the newest iPad is a bit more involved and pricey than upgrading an iPhone.

    Also — although I am not surprised — it is somewhat interesting Apple is sticking with Foxconn despite all the controversy, but realistically you would not expect them to switch providers for the iPad 2. I wouldn't be too surprised if they worked with another company on whatever Apple's next-great-big-thing is, though.

  6. SP
    December 13, 2010

    Wow, the news of second verion of iPAD already started coming in. Are they going to make significant changes from the earlier version or its just the cosmetic feature enhancement. But one thing is for sure Apple has caught the nerves correctly. Its considered fashionable to own an iPad and people obsessed with would welcome new version if it brings more value to the table. I would wonder are they going to obsolete the other one…

  7. jbond
    December 13, 2010

    Has anyone heard what the changes will be from the first ipad to the ipad 2? I can't imagine how they could make enough changes to get people to want to purchase the ipad 2 so quickly.

  8. DataCrunch
    December 13, 2010

    So far based on the leaks and speculation, the known possible differences between the iPad and the iPad 2 are that the iPad 2 will be slimmer, lighter, have 2 cameras (front and back), and a higher resolution display.  They still expect the overall size of the iPad 2 to be similar to the current iPad.  It would be interesting to see if the other tablet companies will be offering 10 inch tablets like the iPad or will future iPads come in smaller sizes as well, like the 7 inch Galaxy Tab.

    As Laurie mentioned, Apple sold about 4.2 million iPads, shorter than the expectations of 5 million, which means there will most likely be a lot of iPad inventory still on the market when the iPad 2 is released.  I would expect that both the iPad and the iPad 2 will be on sale at the same time, with the iPad being offered at much lower prices.  I personally would wait for the iPad 2 if I was thinking of buying an Apple tablet, but for the budget conscious, there may be some very good deals come April (iPad 2 expected launch date) for the current iPads.

  9. Laurie Sullivan
    December 13, 2010

    Hi Dave, 

    Thanks for chiming in. Personally, I wouldn't want an tablet any smaller in size than 5 x 7.  You might as well do the work on a smartphone if they get any smaller. I bought the 3G but never activated it. Apple and AT&T should have provided a pay-as-you-go option for cellular service. I don't want to be locked into another monthly fee. Anyone feel the same? Guess that's one thing I really like about the Kindle. Amazon provides Internet access for free.

    Laurie

     

  10. Laurie Sullivan
    December 13, 2010

    Well DennisQ, I disagree.

    You wrote “people who really desire a tablet have probably already purchased one, so is it really likely that the iPad 2 will be as successful as Apple thinks? Will most existing iPad owners update? Sure, the fanatics will, but the majority have already made too big of an investment. Updating to the newest iPad is a bit more involved and pricey than upgrading an iPhone.”

    The iPad is being adopted by young kids. The parent are buying their six to 10 year olds a tablet rather than a laptop or desktop. The tablet will become the new laptop for jr high and high school kids. That's the type of device they will grow up with. 

    Personally, I prefer the keys on the board. 

    Anyone else have an opinion?

  11. Parser
    December 14, 2010

    I do not have any insides. I can only speculate.I do not have an iPad, but I see its broad possible applications especially in businesses. For examples iPads are seen in: schools are replacing textbooks, medical charts, business presentations, and even as teleprompters. iPads are not only movies.

    The applications make them possible to be applied everywhere. An application VNC allows to connect to your home or office computer and do everything you could do sitting in front of it. There is a trend to use iPads in research as multifaceted instruments collecting data wirelessly from many sensors etc.

    These are the beginnings, but since the possibilities are endless it will boom to all places. I am wondering how the iPad would be able to survive Andorid’s pads. They will compete systematically.

    The move to remove Adobe Flash is not going to resonate well against competition, which already has Falsh. There are probably other moves Apple cannot do and that will just only benefit the costumer. I am sold for iPad possibly new generation. 

     

  12. saranyatil
    December 14, 2010

    There's been quite a bit of buzz around the next iPad. The one we're using now is only six months old, but some are already looking forward to the possibility of a new form factor and a new screen size. Competition is non-existent for iPad right now. All the other guys have tablets shipping “end of the year,” and many more of the more formidable iPad competitors will be out in 2011. Apple's going to do what it can to get the second revision out this year only for that one liner that Steve loves, “We're releasing the next iPad today before our competitors have even caught up with the first generation.” He's used that line a few times, but the iPad itself will probably look very similar to the one you're holding in your hand right now. I predict it will have the same aluminum back, the same bezel and similar weight and the battery life will be mostly unchanged.

    WHAT CAN BE NEW?

    NEW FORM FACTOR

    I'm doubtful of this one but it's worth mentioning in this post. Apple generally waits two to three refreshes before redoing the overall hardware of its devices, but a thinner iPad may be in line that mimics much of Apple's iPhone 4. Squaring off the design would help the device lay flat, but would also make it more susceptible to scratches. I've long wanted an iPad bumper case to help in the event of a drop and wish Apple would move away from aluminum as it's so darn slippery. This is a maybe as Apple can legitimately call this a second generation iPad without modifying the outer shell. Of course, if it's releasing a smaller screen size, it might be a good idea to change things up a bit to throw off the competition. We'll see.

    NEW SCREEN RESOLUTION

    You can be sure that Apple's Retina Display, or something very close, will make its way to iPad. More and more iPhone 4 users are notifying that they use the iPhone over iPad because of the beautiful screen and how the iPad just feels empty and flat. This is an inevitable upgrade that is going to force us early adopters who own an iPad and iPhone 4 to jump in line. That screen is addictive and we want it.

     

     

     

     

     

     

     

     

     

     

     

     

  13. AnalyzeThis
    December 14, 2010

    @Laurie, No offense, but I really, REALLY doubt a significant number of parents are buying $400+ iPads for their elementary school children to take to school. Why? Would it help them in the classroom more? I don't think so… it would just be a distraction. Teachers would probably confiscate it. And there's nearly no way it would last the school year without being stolen/lost/damaged.

    There is certainly a market for the iPad, but at this point that market doesn't include elementary school children… the only exceptions being maybe elementary schools in Beverly Hills and private schools in NYC.

  14. Laurie Sullivan
    December 14, 2010

    DennisQ, Yea, guess that's where I'm coming from. Not necessarily Beverly Hills, but a little south in the surrounding community of Newport Beach located in Orange County, California. I'm not saying I would buy one for a grade school child, but stop by one of the Apple stores in Fashion Island or South Coast Plaza and you will see the moms and the dads standing in line with young kids. And, there are plenty of gadgets around the store for kids to occupy their time while the parents shop.

  15. Laurie Sullivan
    December 14, 2010

    Thank goodness for engineers and innovative minds. I didn't even think of the screen resolution, but that would also make sense, though the resolution is pretty darn good now. I'm waiting for HTML5 capabilities. Or how about 3D?  

    What would it take to make the iPad 3D?

    You guys are awesome. Keep them coming.

  16. AnalyzeThis
    December 14, 2010

    @Laurie, Haha, I actually used to live in Irvine so I know exactly what you're talking about… yes, that makes sense, I am sure there are some Newport Beach kids going to school with iPads, but I really doubt there's a lot of kids in Santa Ana going to school with iPads, for example.

    Anyhow, getting a little more realistic and mainstream, I do think that we're about 5-10 years away from e-Readers becoming somewhat popular for schoolkids… once they drop into the $50-$75 pricepoint and perhaps schools start officially sanctioning textbooks for them, they'd actually serve an educational purpose and not be so costly that breaking the hardware would result in a few weeks worth of grounding.

  17. elctrnx_lyf
    December 14, 2010

    It is something mandatory for a consumer electronics company to launch a new version of its products immediately after they release one version. Since it is not just about the product, it is also about the time. If you are able to be in the market even if you are not so good, there are people ready to buy. When it comes to the case of Apple it is very easy for them to convince the customers. I do not see any necessity for an ipad to have the camera to take pictures. Why does some one want to shoot pictures with an ipad? Really kidding. Excluding this if it is same as the first version it is just a marketing strategy to give some variety to users rather than actually finding out what consumers really want.

  18. Laurie Sullivan
    December 14, 2010

    Yes, elctrnx_lyf, I think it's a sales strategy. Apple excluded a movie camera from the first version of the iPhone. We all know Apple is known for its multimedia capabilities and software, so it seems a little silly for them to forget something as simple as a camera. 

  19. Parser
    December 14, 2010

    Shooting pictures or video with an iPad is a necessary feature, though; it has to be implemented with a thought of business. Meetings and remote presentations require a camera, which would have a capability to capture what is on the table like notes, charts or engineering models. 

  20. Tim Votapka
    December 16, 2010

    The iPad's impressive, but to be honest, I'd rather stick with my compact iPod Touch. The device gives me the functionality I need where ever I go which is why I bought the thing. Now if you put a projector on the Pad, I might change my mind.

  21. Laurie Sullivan
    December 17, 2010

    Hi Tvotapka,

    Yes, I stopped by the Apple store last night to see the iPod touch. Amazing gadget with the picture chat and double cameras. Now the only thing missing is the 3G or 4G connection to make calls from the beach that doesn't provide WiFi. Then Apple can dump the iPhone. 

  22. Tim Votapka
    December 17, 2010

    Consolidation is an advantage alright. Take traveling for example; when I go through security I have to “disarm” myself of three separate devices (phone, pod and camera) along with the belt, shoes and anything else protocols demand even before I open up the laptop to show security it's a legitimate device. I think we're closing the portability/capacity gap very nicely, but as others indicate, there are a few pieces of the puzzle that aren't quite in just yet.

  23. Himanshugupta
    December 31, 2010

    @Tvotapka i also think the current ipad is an exploded version of the ipod touch with little or no extra functionality. It would be very nice to have a projector in the iPad for movies and presentations. It will give ipad a huge advantage to other tech gadgets.

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