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Apple says it will begin production on a new iPad that doubles the capacity of older fourth-generation models.
The new 128-gigabyte version, complete with the retina display, will fetch $799 for the wifi-only version and $929 for the model that connects to cellular wireless. They become available Feb. 5, in black or white.
Already, Apple has sold more than 120 million of its popular tablets. Yet, the timing of today's announcement is particularly intriguing. Less than a week ago, Apple revealed lackluster holiday iPhone sales, reinforcing anxiety among investors that the company is fading from a growth company to a stodgy, if immensely profitable, corporation and that Google's Android phones can fully replace the iPhone as the go-to smartphone.
The discontent has centered in part on Apple's lack of new, attention-grabbing product releases. It's mostly been a slow parade of product enhancements—just like what happened this morning. Fear is high that Apple is aging and that its fate will soon parallel the elder giants in the industry, like Microsoft and IBM.
A 128-gigabyte iPad will likely to try attract attention among businesses, says Citi analyst Glen Yeung. It's likely a move to head off new Ultrabooks and hybrid laptop-tablets scheduled for a release later this year, Yeung says, positioning it as a competitor with laptops, not other tablets. At stake: a market that totals more than 70 million corporate laptops.
"While Apple’s announcement reminds us of their unique ability to stimulate demand with new products and their opportunity in the corporate market, we sense a degree of defensiveness in this announcement," Yeung says. "We don't view this announcement as sufficient to divert investor attention away from the risks to handset market share and margin evident in recent results."
For now, investors seem pleased. Apple shares went up 1.6% in early afternoon trading. Granted, this is after wiping away tens of billions in market value from Apple in recent weeks and reducing it (momentarily) to only the second most valuable company in the world.
AAPL Market Cap data by YCharts
Reach Abram Brown at abrown@forbes.com.
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