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Tablet and Smartphone Updates

Apple Inc. rolled out its new iPad this week, updating the form factor that customers have flocked to in the hundreds of millions over the last two years. Elsewhere, new surveys speak volumes about the exploding importance and adoption of smartphones as sales outpace that of PCs by double. Lastly, Research in Motion, Ltd. updated software for its beleaguered Playbook tablet as the vendor struggles to become more than a footnote in the tablet market.

Focal Points:

  • Apple announced the new iPad, called simply "iPad" rather than the rumored iPad 3 or iPad HD, while simultaneously discounting and keeping the older iPad 2 in production. Starting at $499 for the 16 gigabyte (GB) Wi-Fi-only model, all new iPads feature the company's high-definition, retina display screen with 2048 x 1536 pixels. Other key improvements include a new, A5X processor with dual-core processing and quad-core graphics. A new battery is 70 percent larger than before to accommodate 4G long term evolution (LTE) access, the higher resolution screen, and the more powerful processor, but battery life remains similar to that of the iPad 2. 4G LTE is available on both AT&T Mobility and Verizon Wireless at launch on March 16th in the US. An improved five megapixel rear camera offers improved picture and video recording at up to 1080p.
  • Though smartphones only currently account for 10 percent of all mobile handsets sold, a new report suggests that sales will double in the year 2016 with sales of 1.5 billion. With 750 million units expected to move this year, the smartphone market is already twice that of PC sales, and is expected to become a $320 billion market in five years. Predictions show that smartphones will represent two-thirds of all phones and revenues will grow at a 30 percent compound annual growth rate (CAGR) through 2016 when average phone price will drop from $315 to around $200. In the US, a second survey finds that adults are now more likely to own smartphones than non-smartphones. This is a reversal from a mere nine months ago when adults with cell phones were 27 percent more likely to have dumbphones than smartphones. Smartphones ownership is now 10 percent more common than regular cell phones.
  • The dismal sales of RIM's iPad competitor, the PlayBook, are thanks to the strength of competitive offerings based on more popular operating systems as well as the incompleteness of the PlayBook's initial configuration. In an effort to fix functionality omissions and otherwise improve the user experience, RIM recently shipped the BlackBerry PlayBook OS 2.0. The updated operating system features many of the upgrades that will be available in the forthcoming BlackBerry 10 operating system, including a native e-mail client with rich text editing, tabs, and a unified inbox. The company also made BlackBerry Mobile Fusion available for the Playbook, allowing for application and enforcement of enterprise security rules. The PlayBook also gains access to "thousands" of select Android applications, according to the company, via a new Android Player that runs applications from Google Inc.'s Android Market. In other news this week, Google announced it was changing the name of its Google Android Market to Google Play.

Experton Group believes the introduction of the new iPad makes the most compelling tablet platform even more so, particularly given the addition of newfound processing power and the higher resolution screen. For enterprises actively adopting iPads, the primary driver to move to the updated hardware will be the addition of 4G connectivity for mobile users requiring the fastest access to enterprise systems and the Internet. Otherwise, IT executives would be well-served by continuing to acquire the iPad 2, since it remains in production, and offers nearly the same experience with the added benefit of being $100 less expensive. The new iPad brings iOS 5.1 with it, which will also be made available for all iPads, iPhones released after the iPhone 3GS, and 3rd and 4th generation iPod Touch models. As with other new releases, IT executives should wait a few weeks before deploying this free upgrade to ensure unforeseen issues are addressed. Smartphone adoption, particularly in the developing world, is on the rise and has eclipsed dumbphones as the primary mobile interface for a majority of users. These successes will require appropriate enterprise response both in the development and expansion of resources for employees and customers that offer simplified interfaces customized for smaller display screens. Similarly, IT executives should also be increasingly aware of the security issues associated with enterprise- and employee-owned devices, and ensure that multiple layers of security are implemented, spot-checked, and updated as threats and enhancements become available. RIM's PlayBook update comes none too soon, but likely comes to market far too late. The PlayBook has seen its pricing slashed in half due to poor uptake and increased competition, and the fact that RIM failed to incorporate an e-mail client independent of a companion BlackBerry device speaks volumes of the company's market understanding. IT executives will likely find RIM offering PlayBooks at steeply discounted prices, or in some cases free, as a measure of goodwill and to build up a market presence. Unfortunately for the troubled company, the PlayBook's future is far from certain, and investing heavily in PlayBook-specific applications and infrastructure is ill advised.