Barclays Equity Research has an interesting theory about Apple's new 64-bit A7 chip and how it could change the future of the iPad. The gist: think bigger, both in physical size and what it can do.
In a note to investors Tuesday, the firm laid out why it believes the new 64-bit architecture paves the way for a 13-inch model of the iPad that would be aimed squarely at replacing laptops for both casual and business users. That includes some of Apple's Mac portables with more productivity features.
Such a device -- which, to be clear, is speculation on Barclays' part -- would:
- Pack more RAM than current iPad models thanks to the newer 64-bit architecture
- Sport a Smart Cover with a built-in keyboard and trackpad along with a battery pack to add additional running time
- Cost between $600 to $800
"The whole iOS app ecosystem, extra-long battery life, ultraportability and user familiarity could be more compelling than a Mac if Apple made a true effort," Barclays analyst Ben Reitzes wrote. "And we believe a larger screened iPad would be a much better PC replacement than current tablets, including the Surface, and really be able to take on higher end tasks and start another wave of notebook cannibalization."
That cannibalization would affect Macs of course, but that category is already stagnating, Reitzes argues.
"Even though the products are still positioned at the high end of the market, both the Mac and iPads have really lost their growth profile to smartphones. We believe a convertible strategy could change that dynamic by attracting more of the consumer wallet again."
Whether Apple buys into that same theory is unlikely, at least based on CEO Tim Cook's public remarks. During an earnings call with analysts last October, Cook called Microsoft's first-generation Surface "confusing" and "compromised," even comparing it to "a car that flies and floats."
"I think when people look at the iPad versus competitive offerings, they will continue to want an iPad," he told analysts.
With that said, Apple's in a different place than where it was a year ago. The company's domination of the tablet market has slipped since the iPad was first introduced. According to data from IDC, Apple owned 33 percent of the tablet market in August, which is down from 60 percent the year before. That's as opposed to Android tablets, which grew 163 percent from the previous year, and made up 63 percent of the market. Cook and company have defended that slide by pointing to Web traffic metrics, which suggest that the iPad is still dominating online use.
As for the legitimacy of this 13-inch idea, it may not be that outlandish. Apple's been testing larger versions of the iPad, and iPhone for months, according to a report from The Wall Street Journal. That a gadget maker would offer multiple sizes is typically not noteworthy, though in Apple's case, the company has a highly limited number of models. With the full-sized iPad, it's stuck with a 9.7-inch display for the past three years, while competitors like Sony and HP have introduced 20-inch models and beyond.
It took Apple four models before the delivering a smaller iPad. Reitzes expects this jumbo model to happen within a year and a half.