Apple Inc. is set to continue its domination of the tablet computer market with its newest iPads, which analysts think will appeal to consumers having to buy new devices as they work and learn from home.

The company on Sept. 24 released two new iPads, including the ninth generation of the flagship 10.2-inch model. The tablet maintains the $329 starting price of 2020's eighth-generation model, but now includes a faster chip and twice the minimum storage. However, the biggest upgrade in the new iPad is the 12-megapixel ultrawide front camera, which replaces the usual 1.2-megapixel in previous versions.

Analysts said the new models will help drive demand, especially among remote workers, but others note that tablets in general face hurdles in the marketplace as consumers continue to rely on other devices, such as laptops and phones.

"The tablet market has entered a new phase of ownership and higher demand since a greater emphasis has been put on being able to work and learn remotely," Eric Smith, director of connected computing devices at market research firm Strategy Analytics, said in an interview.

With Apple's decision to focus on upgrades aimed at improving the virtual work and learning experience, "The new iPad is following that trend," Smith said.

One of the biggest changes in the new iPad is that the camera supports Apple's Center Stage feature. Previously available only in the topline iPad Pro model, this feature automatically tracks and zooms the camera frame to match a user's movement during a video call. Center Stage works with Apple's FaceTime as well as other third-party apps such as Zoom Video Communications Inc.'s video platform and Cisco Systems Inc.'s Webex, which have seen usage explode during the COVID-19 pandemic.

Tablet shipments

Hybrid work and more digitized classrooms continued to drive record tablet demand midway through 2021, with global tablet shipments improving 5% year-over-year to reach 45.2 million units, according to Strategy Analytics' tablet shipment report for the second quarter. The research firm also estimated that iPad shipments grew 11% year-over-year to 15.8 million units in the second quarter, with Apple's worldwide market share climbing 1.8 percentage points to 35%.

Meanwhile, 45.2% of respondents with tablet devices currently own at least one iPad model, a 451 Research survey on U.S. consumer device ownership and use conducted in July found. The survey data also found that Apple dominates future tablet buying trends, with 41.3% of planned buyers saying they intend to purchase an iPad.

"Apple has been the front-runner in the tablet space for a long time and based on our future tablet buying trends, it looks like no other manufacturer appears close to catching up," said Michael Nocerino, a research analyst covering consumer spending and tablet and PC buying behavior at 451 Research. "They continue to make a device that doesn't really diverge too much from model to model, making the iPad a stable bet for most consumers."

Limits on demand

One factor that could limit demand going forward, however, is that the majority of tablet users wait until their current devices reach the end of their lifespans before deciding to upgrade to new models. According to the survey data, 65.4% of respondents said they do not plan to buy a tablet device in the future.

"Practicality wins out for the majority of consumers," Nocerino said. "All the fancy features and innovations new tablets offer — which are often only incremental improvements over a previous model — aren't enough to overtake the frugality of holding on to a device as long as possible."

Additionally, most tablet owners actually prefer to use other devices for some of their computing tasks. When asked the most important reason why they do not plan to buy a tablet in the future, 49.8% of respondents said other devices are sufficient, while 22.7% said their current tablet is sufficient.

However, Nocerino added that the future of tablet upgrading still looks positive, as most device upgrades are based on the length of ownership. More than half of the survey respondents (54.6%) said the tablets they own are older than two years. Among iPad owners, 47.6% said their devices are older than two years.

"Since the average upgrade cycle for tablets is around three or four years, looking at current owners whose devices are two years or older gives us the prime group for device upgraders," Nocerino said.

Strategy Analytics' Smith, meanwhile, dismissed the notion that tablets are at the risk of being displaced by other devices.

"Tablets will continue to have their place in the market as they are an important piece of the solution to remote work and learning," Smith said. "Many now have the processing power and operating system support that mid-range laptops have, meaning that significant work can be done on these devices."

Mini me

Apple also launched the sixth-generation 8.3-inch iPad mini, which succeeds the previous model that came out in March 2019. Although this model received more significant upgrades over its predecessor than the standard iPad, it also has a higher starting price of $499.

"The pricing strategy on iPad mini is still a little strange given that the basic iPad starts at $329 and can be upgraded with the Apple Smart Keyboard," Smith said. "In comparison, the mini is a big jump in price for less screen size and functionality."

The iPad mini is also the least popular Apple tablet, according to 451 survey data. Only 13% of respondents who own an iPad owned a mini. In comparison, the 10.2-inch iPad was the most popular with 41.6% ownership, followed by the iPad Pro at 26.1% and iPad Air with 16%.

The new upgrades that the iPad mini received this year could make it a more compelling option than its previous iterations, said Angelo Zino, a senior industry analyst at CFRA Research.

"It's still the most portable option from other tablets, but now includes enhancements and features such as a better design, larger screen and better camera that will be appealing to more consumers," Zino said.

While both the new 10.2-inch iPad and the iPad mini also come in Wi-Fi + Cellular models that now support 5G wireless networks, Zino thinks this feature could benefit the smaller device more.

"While most iPad purchasers won't necessarily focus on the cellular connectivity side of things, 5G support could essentially make the mini a large phone, which could be very attractive to some users," Zino said.