12.9 inch iPadPro: Too pricey or a step towards "2-in-1 Domination"?

Yesterday, Apple launched its latest line of mobile devices. However, it's the "off year" where the "S-ify" their existing line up, so mostly incremental improvements around their successful line of smartphones and tablets. Perhaps the most interesting announcement with respect to the phone line up was the new payment plans you can get. As reported by the Verge, "You can either pay for the 6S in installments of $27 per month, or lease an iPhone for $32 per month, which lets you trade in your phone for a new one every year". Note: this is a US only program.

The other big announcement was the 12.9 inch iPad Pro, which seems odd at first glance as they decided for a bigger form factor. The following video gives a good overview of the features that this new "mega-tablet" offers:

This very much seems to address the woes in the tablet market that we discussed recently. As I noted in a recent blogpost:

"Things don't look as rosy for the iPad. Fortune reported that "the iPad is the current leader in the tablet market, accounting for 24.5% of all tablet sales, its market share has consistently decreased by about 18% over the last few years". 

Nick Statt of CNET posted a great article that discusses some possible reasons as to the declining fortunes of the tablet. Once seen as a PC killer, now is in a state of normalization. One could argue that the tablet is entering into the "trough of disillusionment" after slide down the "peak of inflated expectations"...When it comes to the larger tablet form factors, Nick points out that tablet owners are favouring to keep their iPads for a longer period of time and now are opting for the 2-in-1s (like Lenovo's Yoga line of laptops), which enable more productivity than the tablet counterparts." [emphasis added]

As they have highlighted in the video, they have designed the tablet to work with the Logitech "Create" magnetic clip on keyboard. The keyboard interfaces via the magnetic clips instead of Bluetooth, thus saving battery life. They also unveiled the $99 Apple Pencil, featured in the following video:

Apple has been the vendor of choice for the creative, so it's no surprise that they decided to focus on the stylus instead of the keyboard.

The biggest proof, however, that they are going for the 2-in-1 market is that they invited Microsoft to demo how the Microsoft Office leverages the Apple pencil to work with Excel, Word and PowerPoint. As the Verge notes in this article, the pencil can draw shapes that converts to actual shapes. The video also highlights how you can use the multi-window feature to move content between the Office Apps. Microsoft gives more details on these features on post the put up yesterday.

Although I thought the size of the mega-tablet would throw people off, the price may be a bigger factor that could be an obstacle to consumers. The tablet starts at $799 coming with 64 GB of storage, the keyboard runs about $169, and the pencil is another $99. That puts the starting price at $1,067. In contrast a 2-in-1 Yoga starts at $829.

Will Apple be able to turn its tablet fortunes around?

I think that this move will enable them to compete effectively in the 2-in-1 market place as well as the traditional tablet marketplace: those who are in the market for a new laptop or new tablet will give this a serious look. However, I don't think it will change the overall market demand for the tablet. Tablets are no longer a novelty device: they are largely consumption devices where you can get some work done, but the heavy lifting is best left to a good old laptop.