Market Overview

Is Apple Building a 12-Inch iPad? (AAPL)

Apple (NASDAQ: AAPL) has been frequently associated with the development of bigger and bigger smartphones.

Now the company is rumored to be making a few size-related changes to another one of its popular devices -- the iPad.

According to The Wall Street Journal, Apple has asked its suppliers for "prototype smartphone screens larger than its current iPhone," as well as an iPad screen that measures slightly less than 13 inches diagonally.

The smartphone mention is particularly interesting because it implies that Apple may release multiple iPhone models in the future.

Related: Will Apple Delay the iPhone 5S to Deliver a Bigger Screen?

Historically, Apple has stuck to just one iPhone at a time. The company currently offers two older models that feature a 3.5-inch display. The iPhone 5, Apple's newest smartphone, features a screen that is slightly wider, measuring four inches diagonally.

Most analysts agree that Apple must release more than one type of iPhone -- including a cheaper model -- in order to expand its customer base.

TrendForce's latest research seems to confirm this assumption. In its report, TrendForce found that 53 percent of smartphone customers purchased a mid-range model ($150 to $450) during the second quarter.

Only 35 percent of customers were willing to spend more than $450, while 12 percent purchased a phone for less than $150.

Since TrendForce's price range is so broad, it is impossible to tell exactly how many consumers purchased a smartphone for $150, $200, $300, etc., versus those who spent $450. Even so, it is not unreasonable to think that Apple's current pricing structure has caused it to miss out on some potential customers.

The company's cheapest model -- the 8GB iPhone 4 -- still retails for $450 without a contract.

Customers will pay $549 for the 16GB iPhone 4S and $649 for the iPhone 5.

Apple could choose to continue selling the iPhone 4 at a discounted rate after the iPhone 5S is released, but it would likely retail for no less than $350. For cost-conscious consumers, that would still be a very pricey device.

If Apple is testing more than one screen size, however, it could indicate that the company is looking to avoid potential losses -- and reach new customers -- by releasing five- and six-inch smartphones.

Those devices would compete head-on with Samsung's (OTC: SSNLF) Galaxy Note and Galaxy Mega line of smartphones.

It is not clear who Apple may be targeting with a larger iPad. While the iPad Mini was designed to reach a greater number of consumers and to fend off the rising threat of Amazon's (NASDAQ: AMZN) Kindle Fire, there haven't been any successful tablets in the 13-inch range.

But Apple has sold millions of its 13-inch MacBooks, MacBook Pros and MacBook Airs. Perhaps the company is planning to include a detachable keyboard and create the ultimate Mac/iPad hybrid.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Apple iPad iPhoneNews Rumors Success Stories Tech Best of Benzinga

 

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