Apple Inc.'s modest upgrades to its newest iPads may not help boost the device's shipments, as it may not entice enough people to come out and upgrade devices, analysts said.
On March 18, the company announced a new 10.5-inch iPad Air, which starts at $499, and the 7.9-inch iPad mini, which starts at $399. Prices increase with advanced features. Upgrades were not announced for the top-line iPad Pro, which are the most expensive devices in Apple's tablet lineup.
The main upgrades to the new iPads include the Apple A12 Bionic chip, which will help applications run faster and improve graphics. The neural engine, which is already in the iPhone, will bring enhanced augmented reality and 3D experiences. Another new feature is support for Apple Pencil stylus.
The upgrades of iPads are slowing and the newer models do not have enough features to inspire people to upgrade to the latest version, said Bob O'Donnell, chief analyst at TECHnalysis Research.
The improvements to the iPads are incremental and replicate features that exist in the iPhone, O'Donnell said. "It won't drive a whole new rash of people who don't already own an iPad," he said.
Worldwide tablet shipments declined in 2017, decreasing by 6.6% compared to 2016, according to data compiled by Kagan, a media research group within S&P Global Market Intelligence. The research projected tablet shipments to decline gradually from 2018 to 2022.
The new iPads will not have much of an impact on Apple's tablet shipments, said Kagan analyst Gregory Potter. "I'm still predicting a slight decline in 2019 for Apple," Potter said.
The decline was partly due to people turning to smartphones with larger screens to get work done, Kagan said in the research report. O'Donnell agreed, saying newer devices, like watches and newer devices with folding screens, could also attract more attention for their unique features.
"The devices with folding screens are seven times more expensive, but the point is you have more options," he said.
During its Jan. 29 earnings call, Apple said its iPad revenue was up 17% year over year in the most recent quarter, which was its highest growth rate in almost six years. That was mostly driven by the high-margin iPad Pros released in November. However, Apple's shipments were flat, at about 43.5 million in fiscal 2018, compared to 43.8 million in fiscal 2017, with prices of devices falling by 2%, according to a March 16 research report from Angelo Zino, an equity research analyst at CFRA Equity Research.
Apple has a slow refresh cycle for iPads, and with bigger phones, people have found less need for iPads, said Benjamin Dunbar, an investment group leader who specializes in technology at Gerber Kawasaki Wealth & Investment Management. "Apple just has to hope people with the four-plus-year-old iPads maybe start to buy," he said. There will be no supply issues or shortages, as has been the case with some older iPhones and iPads in heavy demand, he said. Apple is already taking orders for the new iPads.
There's a chance that a new subscription service announcement reportedly coming soon could get some people to commit to getting new iPad, Dunbar said.