Tech

iPad 5, iPad mini 2: Forget iPhone 6 And iWatch, Tablets Will Save Apple From Android

By Jordan Mammo , Apr 27, 2013 01:01 PM EDT

Could the iPad 5 and iPad mini 2 actually be Apple's biggest releases in 2013? At this point, many analysts and tech watchers think Apple is under siege. The company needs a new avenue for growth, and people are looking to the iWatch, iTV, and possibly even an overhauled iPhone 6 with killer features to disrupt the market once again. What if they're wrong?

It may be that tablets are what end up saving Apple in the long run. If that's the case, then the iPad 5 and iPad mini 2 are what Cupertino needs to knock out of the park, even if every Android tablet combined manages to eek out a market share victory for the overall year.

As we know, the iPhone's success is being thoroughly tested by Samsung, and it's unlikely the iPhone 6 / 5S will radically change the current trajectory. We noted yesterday that innovation in the smartphone market seems to be stalling, and it's hard to imagine what exactly a new iPhone could do to change that (redesigned iOS 7 or not). The fact is that every hardware maker already makes great top-of-the-line smartphones; personal preferences aside, it's extremely difficult to make a device that objectively stands above the rest.

According to Slate's Farhad Manjoo, the iPhone will continue to be popular, but heated competition and the expansion of low-end smartphones will cause Apple's profit margins to continue to decline. That leaves room for the company's tablet line to become its top money maker. Provided the iPad 5 and iPad mini 2 keep the momentum going, in just a couple of years it's going to be huge.

It's true that during the first quarter of 2013, the iPad's share of tablet sales shrank to below 50 percent. If that sounds worrying, it may not be. A total of 19 million iPads were sold during that time, meaning the company actually sold 65 percent more tablets than it did the same time last year.

"By comparison, the company sold 37 million iPhones, about 7 percent more than the previous year. If this trend continues, the iPad will eclipse the iPhone as the company's best-selling product by 2015, if not sooner," Manjoo wrote. "After that, our picture of Apple will change. It will be the world's biggest tablet company, one that also dabbles in phones and Macs."

The reason? One of the biggest advantages Apple has is not just that its tablets actually make money, but the fact that it has more than 350,000 apps that are specific to tablets. The Google Play store has nowhere near that number, and you can see Apple's advantages in effect. Apple had less market share last quarter, but iPad usage still makes up 82 percent of all tablet web use.

"As in the iPod business, the short-term profit loss will help solidify long-term dominance," Manjoo wrote. "Here's the lock-in story again: Apple is certain that people who jump on the iPad bandwagon today will stick with it for life. Even if your iPad Mini purchase doesn't help Apple's bottom line very much, you'll buy lots and lots of apps for your device. Then, when the time comes to buy a new tablet, you'll have little incentive to switch to Android and have to buy all new apps."

Tablets aren't exactly new anymore, but their growth potential is still huge because people are generally still migrating towards them. That might mean Android and even Microsoft have room to grow (and they do), but it also means that if Apple can keep growing in the arena like it has been, it's not going to be in trouble anytime soon.

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