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Wednesday, January 30, 2013


In a somewhat uncharacteristic direct response to a competitor, Apple introduced a 128 GB fourth-generation iPad, today, a move that appears to be in response to the Microsoft Surface Pro.

The launch of the 128GB iPad follows Microsoft’s announcing the pricing and availability of Surface Pro tablet. Apple’s high capacity model will begin shipping February 5th, four days before Surface Pro goes on sale.

“That was a pretty savvy move by Apple,” IDC research director Tom Mainelli told Wired. “If you were to ask Apple, they’d say they dont make product announcements related to what anyone else is doing. But if you line it up, it does make for a compelling story versus the Surface Pro.”

The Surface Pro, priced at $899 for the 64GB model and $999 for the 128GB model respectively, could be a big hit in the enterprise market. And Mainelli believes 2013 will be a big year for tablets in business.

“In 2013 we’ll see a lot of those companies that were on the sidelines waiting to see what would happen with Windows 8 making the jump to iPad, and the higher capacity could certainly be appealing to more corporate buyers,” Mainelli said.

Apple’s 128 GB model starts at $799 and jumps to $929 for the WiFi + Cellular version.

Forrester analyst Charles Golvin pointed out that in the past, a 128 GB iPad offering would have been far too expensive to be a reasonable option for many, or to fit Apple’s pricing scheme. But the prices for Flash memory have gone down significantly in recent years, making the $100 price jump from the 64 GB model to 128 GB possible.

“Despite the move to the cloud, there are customers out there that are finding themselves hitting the ceiling on the storage on a 64 GB iPad,” Golvin said. As people are using tablets more and more, they are finding new and innovative uses for them, including more media to consume and files and images to store.

And while some may still decide to go the Windows route with their tablet purchases, particularly in the enterprise, there are a large number of Windows emulators and mirroring apps out there for those that rely on Microsoft software and want it on a tablet. And companies know they can create or buy apps to use their tablet exactly the way they need to.

Although a minority, this higher capacity iPad could also end up luring some potential MacBook Air buyers into opting for the lighter tablet instead, Golvin said. The MacBook Air does have some “tablet-like” qualities, in terms of lightness and the touch-based gestures on its trackpad. With comparable prices, the 128 GB storage level could make it more on par with the ultraportable laptop offering.

For those in the stocks and investment world, by creating a new, higher priced flagship offering Apple also has the opportunity to raise its ASP (average selling price) of the iPad, which has dropped since the launch of the more budget friendly iPad mini. In layman’s terms: Apple can make boatloads more money on each iPad sold.

So basically Apple just found a way to tap into an even larger potential tablet segment, and make a ridiculous number of benjamins in the process.

Christina is a Wired.com staff writer covering Apple, robotics, and everything in between. She's also written for Gizmodo and Wired magazine.

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