Market Overview

Will Apple Unveil the iPad 4 on Tuesday?

Apple (NASDAQ: AAPL) has a big event planned for Tuesday, October 23. The company is expected to introduce the iPad Mini, a seven-inch version of its landmark tablet.

Apple may also unveil the new iMac, as well as upgrades to the Mac Mini and 13-inch MacBook Pro. The latter seems unlikely, as Apple already upgraded the 13-inch model over the summer, albeit without a solid state drive or a Retina Display.

There is one other product Apple could unveil tomorrow: the fourth-generation iPad. This might sound like a far-fetched fantasy that will never come true. But there are many reasons why Apple should -- and possibly could -- bring the next iPad to market far sooner than expected.

Premature vs. Frequent Upgrades

Consumers hate to wait for new technology. Whether it's a tablet, smartphone, game console or some other device, consumers are very impatient creatures.

This has made it easy for Apple to hype and promote the annual upgrades of its products with minimal effort. The company spends millions to market its devices after they are shipped to retailers. Until then, Apple relies on tech bloggers, product enthusiasts and mainstream reporters to promote its products. Thus far, this strategy has worked beautifully.

If Apple were to release too many upgrades, it would run the risk of hurting future sales. One of Benzinga's former news analysts waited 18 months to purchase a new MacBook because he was always eager to see what the next upgrade would be -- and subsequently, the upgrade after that. This is partially due to the fact that the company had not created the machine he wanted (he was waiting for something along the lines of the Next-Gen MacBook Pro). But in general, they did not want to miss out on a superior upgrade than the one that was currently available.

If Apple releases the iPad Mini this fall, it could lead to a similar dilemma. There are fears that it could cannibalize sales of the third-generation iPad. It may also create a situation where consumers are too afraid to buy an iPad because they wonder when the next iteration will be released.

This is not a problem that Apple has ever faced with the iPod or the iPhone. Consumers know that when a new iPhone arrives, the company will stand by it for roughly a year. Thus, the iPhone 5 will still be a "new" device in January 2013.

The same may not be true for the iPad Mini. If Apple only chooses to release the smaller iPad this year, consumers will speculate about the iPad 4 and its spring 2013 arrival. They may wonder how it will differ from the current iPads, if it will be as thin and as light as the iPad Mini, or if it will contain new features that they cannot live without. If they start to worry about that, they will be less likely to buy an iPad Mini this fall.

While worrisome consumers may not be the market that Apple is targeting (especially since the iPad Mini is designed to serve the smaller tablet market), that does not mean that the company should be willing to sacrifice those sales. If the iPad Mini is appealing enough, Apple could feasibly sell the device to anyone, but not if consumers wonder what else is around the corner.

Thus, it would make a lot more sense for Apple to unveil both the iPad 4 and the iPad Mini on Tuesday.

Product Upgrade Conundrum

Based on the rumors alone, it seems that Apple plans to release each iPad Mini in the fall and each full-size iPad in the spring, but the logic behind this is unclear.

Just as the iPod Touch borrows key features from the iPhone 5 (and was rightfully upgraded on the day the iPhone 5 was announced), the iPad Mini is likely to mirror the third-generation iPad. If Apple separates the product release schedules for each iPad, consumers will always be torn between iterations, potentially hurting sales of both devices.

By releasing both tablets together, consumers would not have to worry about the next iteration and when it will be released.

Pricing Problems

Benzinga has already addressed the issue of pricing the iPad Mini. Assuming this does not concern Apple, there is still one challenge ahead for the company. When the iPad 4 is released, the third-generation model is likely to get a price cut of $100 or more. At that time, it will then be closer in price to the iPad Mini. The iPad 2, meanwhile, will be even cheaper (if still available), making the iPad Mini even less attractive.

By releasing the iPad 4 and iPad Mini simultaneously, Apple can cut the prices of its older models all at once and let consumers decide what they want right now. If they choose the third-generation iPad, Apple can rest easy knowing it still got a sale. If they choose one of the newer models, the company will gain higher profits. Either way, Apple wins.

The Competition is Growing

In recent months, a number of Apple competitors unveiled new tablets, including Amazon (NASDAQ: AMZN) and Barnes & Noble (NYSE: BKS). The devices may not be as powerful as the third-generation iPad, but they are a lot cheaper, and cheap devices threaten to reduce Apple's bottom line.

This is why Apple is thought to have sped up plans to build a smaller iPad -- to stop the competition from devouring the lower-end market. Size is only part of the equation. While some consumers genuinely want a seven-inch tablet, many are buying the smaller devices because they are less expensive.

This fall, Amazon and Barnes & Noble showed that they are no longer content to compete with Apple on a seven-inch scale. They both unveiled full-size tablets. Now Google (NASDAQ: GOOG) is expected to do the same while doubling the memory of its existing tablet, the Nexus 7.

Should Apple wait around for these and other manufacturers to announce another round of tablets or upgrades? The iPad maker would be wise to go all-in and unveil the iPad Mini and the iPad 4 this week.

Follow me @LouisBedigianBZ

Posted-In: Apple iPad 4 iPad MiniNews Rumors Events Tech Best of Benzinga

 

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