Apple iPad 2 Represents Huge Company Bet: Analyst

Apple needs to ensure that even current iPad owners flock to the iPad 2, according to an analyst. The alternative is losing ground to competitors such as the Motorola Xoom.

Apple is widely expected to unveil the next-generation iPad in a San Francisco event March 2-and, according to at least one analyst, the device's importance to the company is paramount.

"This event is not to be taken lightly, as the iPad is an important growth driver for Apple, and the company enjoys a first-mover advantage," Brian White, an analyst with Ticonderoga Securities, wrote in a March 1 research note. "Assuming a new iPad is unveiled at this event, we believe Apple must make a convincing case for why the iPad 2 is better than the plethora of competitors coming to market."

On top of that tall order, added White, Apple must also persuade buyers of the first iPad to upgrade to iPad 2. In his estimation, the next-generation tablet will come with "a more powerful processor, more memory, slightly thinner/lighter form factor, a modified port interface and at least one camera."

Despite the competitive pressures exerted by Android-based tablets, White thinks that Apple's app ecosystem and strong brand recognition will allow it to "outpace" rivals in the near term.

Apple's iPad unveiling poses a challenge to Motorola, which is seeking to build momentum for its recently released Xoom. Equipped with tablet-optimized Android 3.0, also known as "Honeycomb," and loaded with powerful hardware, such as the Nvidia Tegra 2 dual-core processor, the Xoom seeks to drain away at least some of the iPad's substantial market share.

However, Xoom's hefty $800 price tag essentially aims it only at the market tier currently occupied by the priciest iPads. Other manufacturers, including Samsung's Galaxy and Dell's Streak 7, feature a slightly lower price point and a more competitive dynamic with mid- to low-cost iPad models.

Since its April 2010 debut, the iPad has sold around 15 million units. If the next iPad's features prove so wide-ranging and impressive as to instantly antiquate its predecessor, millions of users who shelled out hundreds of dollars for their tablet could be irked. By the same token, an iPad 2 with only incremental hardware and software advances risks losing ground to increasingly aggressive (and increasingly powerful) competitors.

Pundits widely predict that the iPad will include at least one camera, and possibly a combination of front- and rear-facing ones for FaceTime video-conferencing. In addition, they all seem to agree that the next iPad will feature a slimmer and lighter body. From there, though, opinions diverge wildly: some believe that Apple's next tablet will boast an upgraded processor, while others talk of the absence of a mechanical home button.

In the end, Apple will soon settle the matter once and for all.