Apple Gets Lukewarm Reaction With New iPad

At the launch event Wednesday for the new iPad, Apple Inc. (Nasdaq: AAPL) CEO Timothy Cook talked about what he called a post-PC era, when the desktop computer no longer represents the epicenter of users' lives. Apple claims to be the leader in the race to bring about this era, with devices that include the venerable (and somewhat antiquated) iPod, the iPhone, and the latest version of the iPad.

However, its design and visual appeal aside, the new iPad raises a question about the innovation coming out of Apple these days.

During the launch event, Cook said Apple sold 62 million iOS-based devices in the fourth quarter, including the iPad, iPhone, and iPod Touch lines. The company sold 15.4 million iPads, which Cook said outpaced the sales of each PC maker for the entire year. He also said Apple generated 76% of its fourth-quarter revenue from post-PC gadgets.

Apple's stock is coming off a 52-week high of $548.21 during the March 1 trading session. The shares closed at $541.99 the day it launched the new iPad.

The new iPad (which is not the iPad 3 or iPad HD, as some journalists and bloggers expected) sports an improved high-definition display, voice recognition software, and 4G LTE connectivity on select wireless networks. Some may question whether the upgrades constitute a true evolution of the device, but Stephen Baker, vice president of industry analysis at the NPD Group, said it is a whole new product for Apple -- depending on how it is positioned in the market.

"What they're saying, without directly saying it, is this is your on-the-go video machine," Baker said. "This is your small television."

He referred to the new display as a possible move by Apple to position the device as a platform more for watching video than for Web browsing. "I think, in Apple's mind, it totally differentiates the product from what they offered before."

Apple remains the dominant player among tablet makers, Baker said, and its rivals are scrambling for more marketshare. "There's nothing even close. For now, it's iPad and a million other products that don't mean a lot in the big scheme of things." Some argue that the Amazon.com Inc. (Nasdaq: AMZN) Kindle Fire has become a game-changer in the tablet market, but he said the product's key differentiator is its lower price. So far, Apple has not cut prices on its newest versions of the iPad, though it is discounting older-generation tablets.

The form factor of the new iPad looks much the same as the iPad 2, and Apple said it will deliver the same battery life (about nine hours), even though it has beefier hardware under the hood. So what's the big deal with this gadget? The new display trounces rival tablets. It squeezes in 264 pixels per square inch, while the Samsung Corp. Galaxy Tab 10.1's high-definition display offers 149 pixels per square inch. More pixels mean clearer, more vibrant images.

Still, has innovation slowed at Apple? The iPhone 4S drew somewhat mixed reactions after its debut last year, and the new iPad seems to be more about nuances than drastic changes in technology, at least so far. "The gadget guys might say this isn't a really differentiated product, but consumers say, 'This is great, we want more of it,'" Baker said.

The new iPad is also equipped with a smattering of novel features, such as speech-to-text dictation software. Depending on the model, the new iPad can connect to the AT&T Inc. (NYSE: T) and Verizon Wireless 4G LTE networks. It looks like Sprint Nextel Corp. (NYSE: S) missed out on this 4G party with Apple. There will be six models of the new iPad, including WiFi-only versions. It is slated to hit US stores next Friday.