Yesterday, Apple announced its 2nd generation iPad and the headlines read:

Apple iPad 2 Revealed, 33% Thinner, in Black and White, Starting at $499… (Fast Company)
iPad 2 Launched: More Features, Same Price (ConceivablyTech)
Apple Laps The Competition With iPad 2 (Forbes)
Apple Announces The iPad 2: A5 Processor, Front And Back Cameras… (TechCrunch)

“Thinner. Lighter. Faster. FaceTime. Smart Covers. 10-hour Battery”

That is what appears to be Apple’s power messages for the new iPad… all adjectives and features that emphasize mobility, and why not?  The 1st generation product has been a huge success, so why mess with perfection? There’s no doubt that Apple has a leg up on the competition in terms of the tablet market. A recent article by Hugo Miller of BusinessWeek cites a research study that shows Apple having a 9.75% cost advantage over the competition, and explains why.

If this is the case, for the first time that I could think of, Apple will be the price leader in the marketplace with a $499 tablet loaded with features.  The competition is going to have to differentiate somehow, somewhere.  The Wall Street Journal sees a tablet price war coming, but no one seems to, or wants to offer a tablet that can compete with Apple in the $500 range. I did a quick search on Amazon, and there are plenty of tablets in the sub-$500 range from relatively unknown suppliers, but look at the customer reviews…not too enticing.

So where is the differentiation?

I say storage may be something to tout, since Apple stuck with the up to 64GB of storage on the iPad 2, and still no storage expansion that I could see, not even an SD slot.  It would have been cool to see Apple include a Thunderbolt connection. So, is this an opportunity for competitors to take tablets to another level?  Archos is trying to with its 7o internet tablet complete with a Momentus Thin 250GB drive. Should others jump on the bandwagon?  If the competitive price range is going to be the $750 to $1000, we’re getting very “laptop like” in terms of pricing….why not features?  At least offer USB 3.0.

I think much of Apple’s success with its first generation iPad was the price point.  If a bunch of $750+ tablets hit the market, perhaps consumers may take a second look at going with a tablet if they could get a new laptop for around the same price.  This begs the question…why are people buying tablets?  Apple’s power messaging would indicate mobility (form factor, weight, speed).   Storage plays a large role in mobility, hence the huge market for portable hard drives.

If I were Apple’s competition, I’d be taking a lot closer look at storage, both inside the tablet, and out.

What do you think?

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