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Why the iPad 3 Rumors Are Premature, At Best

If you’re on the lookout for iPad 2 (s aapl) news, which, if you’re an Apple fan, you probably are, then you may have come across the smattering of stories about a possible iPad 3 release sometime in fall of 2011. Look closely, and you’ll see they all stem from one source: an educated guess made by John Gruber.

Gruber laid out the possibility of an iPad 3 arriving ahead of schedule in the fall, following the iPad 2’s release this spring, in an article about the tablet scene and Apple’s plans within that picture for 2011. For the record, I’m not questioning Gruber’s predictive abilities or the value of his educated guess in this instance, but I am questioning how quickly other outlets took up the report as gospel, without even considering alternate possibilities. The Atlantic’s vanilla reblog is typical of most stories coming out of Gruber’s post.

In the interest of balance, I’d like to offer some counterpoints to Gruber’s prediction, because in many ways, Apple releasing two iPads in one year (especially this year) doesn’t make sense at all. Take, for example, Gruber’s opinions regarding the comparative merits of April and September as release dates:

I don’t think April is a particularly good month for an annual iPad release. I don’t think it’s a particularly bad month, either, but it doesn’t make as much sense as September. April is four months into the new year, but still feels like “early” in the year. That leads to whispers and rumors during the holiday season that people should wait. Shipping new hardware in April adds another milestone to the iOS release schedule, too.

I’d actually argue just the opposite. An April (or spring) release makes sense for the iPad, precisely because, as Gruber notes, “[t]he iPad was a massive hit during the past holiday season.” Apple stands to gain little from positioning the iPad as a fall release, since it already enjoys a huge sales bump from holiday shoppers. With an April launch, the iPad stands to see higher-than-average sales periods twice a year (once at launch and once again around the holidays), rather than just one enormous one. Despite the inevitable suggestions that people should wait for new hardware releases when the end of a cycle draws near, I’d argue that by and large, average consumers will still go out and buy what they want to, leaving those of us closest to the tech pulse to worry about upgrade cycles. The iPad’s 2010 holiday success is testament to that belief.

Another argument that came up in favor of an iPad 3 release in September was that iPods, which currently get their annual refresh then, don’t have the kind of consumer appeal they once did. The iPod touch is great, but it’s a known quantity, argues Gruber, and not likely to generate the kind of enthusiasm a new iPad would. It’s another good point, but it ignores the possibility that Apple may have intentionally put the iPod and Mac releases (new Mac hardware often comes in October) just ahead of the holiday season because those are the products that stand to gain the most from pre-holiday hype. Announce a new iPod line in the spring, and not only does it run the risk of being seen as less than exciting by consumers, but it also might be forgotten by Christmas. If Apple uses an iPad 3 to steal the show from its other fall releases, mind share among consumers might dwindle even further. I don’t think Apple’s willing to let that happen just yet.

Consider, too, that the iPad was released at a specific time of Apple’s choosing the first time around. Because Apple faced no competition, and no competitor devices were even really imminent, it had absolute freedom regarding when it chose to ship the device, and it chose April (following a January introduction). Admittedly, Apple had no way of knowing the iPad would be the success it has been, but it doesn’t seem like the kind of company that would be caught unprepared for that eventuality. I think Apple chose April knowing full well that it might become a marquee device for the company, and that it had, and continues to have, very good reasons for doing so.

There’s also the issue of the supply chain implications resulting from a two-model single year release for the iPad. Apple maintains its price advantage over its competitors in the tablet game largely because it knows how to effectively manipulate the supply chain to its advantage, making component scarcity and pricing an issue for other manufacturers. Ordering parts for an iPad 2 and iPad 3 that need to be released within months of each other, and have to be different enough in terms of their hardware capabilities to convince buyers to upgrade early could seriously endanger Apple’s cost advantage.

Finally, there’s another outside possibility that my colleague Kevin Tofel suggested which might make more sense than a fall iPad 3 introduction: a fall 7-inch iPad product announcement. Steve Jobs is on record against a 7-inch iPad, but he’s been known to contradict himself in the past. The introduction of a 7-inch iPad would manage to reinvigorate Apple’s fall announcements without aggravating consumers who purchased the iPad 2 in spring, and would steal focus from any competitor tablets released in the interim. The 7-inch form factor has yet to really prove itself, but Apple is in the best position of any tablet maker to take a risk and see if it strikes a chord when combined with the usability of OS X. Jobs’ disparaging comments about 7-inch devices could even be an intentional misdirect aimed at competitors. It’s a long shot, but not any more of one than Gruber’s suggestion.

Gruber’s track record is good, and MG Siegler of TechCrunch did back him up with some information from anonymous sources (which isn’t conclusively tied to a fall shipping iPad 3), so it’s quite possible that he’s right. But the evidence above, and Apple’s track record with product releases, suggests it might be wise to exercise a little caution before becoming a true believer.

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19 Responses to “Why the iPad 3 Rumors Are Premature, At Best”

  1. I see iPad 3 being a 2012 release for a few reasons. First, this gives Apple more time to assess OS X Lion in the marketplace, which may inform whether and how they implement any convergence of their iPad. notebook and Mac Mini product lines. Second, Darrell I agree with your assertion regarding supply chain management; with increasing competition for scarce components, Apple can leapfrog and sign high-volume agreements for next-generation displays, components, materials, etc. while competitors work to catch up.

  2. Great article. I’m glad I wasn’t the only one thinking that we, as a community, may have latched onto the concept of iPad 3 in the fall a little too quickly. What about iTunes/MobileMe/cloud services as the Fall surprise or a combo of a 7″ iPad and iPhone Nano? The later would make for a coherent theme of smaller, possibly cheaper, i-devices.

  3. I don’t think that Apple wants to move the iPad update to Fall. If anything, Apple seems to be trying to spread product introductions/updates around the year. iPad, then iPhone, then AppleTV, then iPod (with computer updates scattered around for spice). I suspect that Apple believes they’ll get better sales spreading the introductions around the year instead of having them compete against each other just before Christmas. And it makes sense for the iPods, which are traditional Christmas presents, to be the pre-Christmas introduction. I also think that Apple would generate some customer bad will due to buyer regret from those who bought in Spring, only to see a fancier model come out only 6 months later, instead of a year as anticipated. Of course, Apple could add another member of the family with a different screen size, as Gruber speculates, without running into this issue.

  4. Your analysis makes complete sense. A 7″ form factor would be a “fall surprise”. I can’t imagine Apple announcing new iPods, a new iPhone, a new iPad, and new Macs all toward the end of the year. Spreading it out gives more consumers the chance to actually gain interest and by MORE devices, rather than only one. Not many consumers buy costly items in a short period of time.

  5. I’d argue the possibility that this April will be a minor hardware speed bump with updated specs and a few new features such as camera. This should clear the way for a next generation iPad this fall with all the bells & whistles we’re expecting from Apple.