Compared with lower-margin iPad mini with Retina display, which shipments has been tepid, higher-margin iPad Air was a hot selling item in 4Q13, which will slow Apple in developing new iPad mini models. We believe Apple plans to launch upgraded iPad Air early this year, and will accelerate development of 12.9” iPad. As such, more resources will be allocated to these two products, which will affect the progress of the development of new iPad mini. All told, we think chances of the debut of a new iPad mini in 2H14 are slim. In addition, the 12.9” iPad is unlikely to be offered in 2014. For these reasons, we predict the only new iPad product in 2H14 will be the upgraded iPad Air.
Kuo believes the 12.9-inch iPad will allow developers to create more interactive apps thanks to its larger screen size. However, Apple is reportedly focusing its energy on the iWatch which will be released this year.
Kuo also says that Apple will restart mass production of the iPad 4 in Q1 2014 as it discontinues the iPad 2. Finally, he expects iPad shipments to fall from 34 million units in 1H2013 to below 30 million units in 1H2014.