Wall Street’s top analysts reacted positively to Apple’s unveiling of the iPad 2 on Wednesday and remained optimistic about the company’s continued ability to lead the tablet market, especially after Apple CEO Steve Jobs, who took a medical leave from the job in January, made a surprise appearance for the launch of the company’s second-generation tablet PC.
As expected, Apple revealed a faster, thinner and lighter second-generation iPad, officially named iPad 2, to the media at the Yerba Buena Center for the Arts in San Francisco on Wednesday.
Mr. Jobs also took time to trash-talk the competition as being “just flummoxed” and offer his own definition of the tablet market as a “post-PC” space.
The touchscreen tablet, which sports front- and rear-facing cameras, an upgraded A5 CPU and improved graphics processing, will go on sale March 11 in the U.S.
Though Wall Street analysts admitted that Wednesday’s event contained few surprises, they remained confident that several key “evolutionary” upgrades and the addition of new content production apps to the iPad would continue to drive growth for Apple.
Boosted by investor confidence in both the iPad 2 and a surprise onstage appearance by Apple CEO Steve Jobs, shares of Apple closed the day up .80 percent at $352.12.
Apple’s iPad has been a huge success since being launched a little over a year ago with sales of 15 million, which have outstripped even the company’s own expectations. Rival tech firms have launched a host of tablet computers which claim to match – and in some cases surpass – the iPad.
The challenge is led by Motorola’s Xoom, together with the Samsung Galaxy Tab 10.1, while others from the BlackBerry manufacturer RIM and Hewlett Packard are also on the horizon.
Technology analyst at Ovum, Adam Leach, said: “In such a fast moving market Apple is forced to release new versions of its hardware to stay ahead.”
He added: “Apple clearly had first mover advantage, however, its competitors have been hot on its heels with a slew of tablet devices from big brand vendors such as Samsung, Motorola, HP, HTC and RIM, all of which have announced tablet devices which aim to replicate the Apple experience, which is notoriously difficult to match.”
However, many of these companies have announced tablets but have shied away from disclosing prices or even ship dates. HP’s TouchPad, for example, running an upgraded version of Palm’s webOS, and RIM’s BlackBerry PlayBook might look impressive in demonstrations.
They also might offer advantages over Apple’s tablet in areas such as multitasking (the iPad and iPhone are particularly clumsy about letting background programs get your attention) and support for Web multimedia encoded in Adobe’s Flash (Apple’s mobile products don’t support Flash.)
But if those companies were hoping that Apple would add $100 to the iPad’s price before they would announce those details, they’ll have to go back to the touchscreen and revise their plans.
Of all the name-brand tablets competing with the iPad, and now the iPad 2, only Barnes & Noble’s NookColor has easily beaten Apple’s tablets on price. And that $249 Android device is essentially an e-book reader with a Web browser, not an all-purpose device such as the iPad or iPad 2.
For analyst Mike Abramsky with RBC Capital Markets, the slimmer form factor and ‘Smart Covers’ magnetic cases demonstrate the design innovation that Apple needs to sustain leadership in the tablet market, while evolutionary like FaceTime cameras, an HDMI-out accessory and a dual-core processor will keep the pressure on Apple’s competitors.
Abramsky viewed Jobs’ appearance as a “welcome surprise to the event,” while noting that the other announcements and iPad 2 features were “largely inline” with expectations. “Apple’s iPad 2 raises the bar and sustains pressure on competitors, and continues to target media-centric tablet consumers seeking a premium experience,” Abramsky wrote.
However, according to Abramsky, the refreshed tablet from Apple doesn’t “alter competitive landscape for pending Android tablets or PlayBook, which may appeal to different market segments (like Android/Google fans, productivity-centric or enterprise segments).”
Katy Huberty with Morgan Stanley views the iPad 2 as “an important evolutionary step in the product’s short history” that will likely serve to widen Apple’s lead in the tablet market by building on the original iPad’s “overall system, ecosystem and pricing advantage.”
The analyst noted that there were “no big surprises” at the event, though she did notice “dramatic performance improvements,” especially with webpage loading speeds, and an improved user experience during a hands on demo with the new device.
Huberty predicts a high adoption rate of the “Smart Covers,” which could partially offset the second-generation tablet’s presumably higher bill of materials.
The March 11 ship date in the U.S. (March 25 worldwide) for the iPad 2 was “faster than expected” and could help Apple Inc. to continue widening its lead on competitors, says analyst. [via Daily Mail (UK), Washington Post, AppleInsider]