Jobs Unveils Apple's iPad 2 - WSJ.com

Steve Jobs asserted Apple Inc.'s command over the hottest market in computing and demonstrated his flair as high-tech's most celebrated pitchman.

The Silicon Valley giant's chief executive, who took a medical leave of absence in January, was the surprise master of ceremonies as Apple unveiled a second version of its iPad tablet—a product that has created a multi-billion dollar business in less than a year and left rivals scrambling.

Wall Street Journal Personal Technology Columnist Walt Mossberg gives his first impressions of Apple's new iPad2 which was unveiled today by Steve Jobs.

Mr. Jobs, who strode onto a San Francisco stage Wednesday to a standing ovation, showed off the thinner, faster iPad 2 in a presentation full of swipes at competitors flooding into the market. The crush of tablets includes Motorola Mobility Holdings Inc.'s recently released Xoom and the forthcoming Playbook from BlackBerry maker Research In Motion Ltd.

Apple has a more than 90% market share and "our competitors are just flummoxed," Mr. Jobs said, adding that if 2010 was the "year of the iPad," he might call 2011 "the year of the copycats."

Simon Constable and Marcelo Prince discuss what Steve Jobs' surprise appearance at Apple's Wednesday event could signal. Plus: where will iPad 2 fit in the tablet market?

The iPad 2, which like its predecessors starts at $499, will ship in the U.S. on March 11 and in 26 more countries on March 25. It comes with front and rear cameras—addressing an omission in the initial model—and a new Apple-designed chip that Mr. Jobs said performs standard calculations twice as fast as its predecessor and offers a nine-fold boost in graphics performance.

• See all videos from Apple's event

Many of the changes were widely expected, and evolutionary. But analysts said Apple had reinforced its edge with the sheer volume of new features, its lead in applications created for the iPad and its lower price point than some rivals; Xoom, for example, starts at $799 without a cellular service plan, compared with $729 for a comparable iPad.

"Apple moved the goal posts before most of their competitors even take the field," said Noah Elkin, an analyst at research firm eMarketer.

Mr. Jobs stressed that the new iPad was part of a growing new "post-PC" category of devices, which also includes its iPhone. The company faced a slew of skeptics when it first introduced the iPad a year ago, yet it managed to sell 14.8 million of the devices globally as of the end of 2010, generating $9.5 billion in revenue.

The tablet accelerated the growth of a large ancillary business based on software and content sales; Mr. Jobs said Apple now has 200 million accounts with customers around the world, and said software developers have made more than $2 billion from sales through the company's App Store.

The iPad has become a major force in the publishing world, and a rival to Amazon.com Inc.'s Kindle. Apple said more than 2,500 book publishers have joined its iBookstore and more than 100 million e-books have been downloaded.

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Introducing the iPad 2

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Apple CEO Steve Jobs on stage at the iPad 2 introduction.

Mr. Jobs disclosed that e-books published by Bertelsmann AG's Random House Inc., the country's largest consumer book publisher, are for the first time being sold directly via the iBookstore. Random House titles had been conspicuously absent because of a disagreement related to pricing.

Some magazine and newspaper makers have also flocked to the iPad, though Apple has triggered opposition with a recent policy that requires them to offer any subscriptions through apps as well as their own websites, which requires a revenue split with Apple.

Magazine publishers are hopeful that competitors spur Apple to relax such policies, but some on Wednesday acknowledged Apple's position looks even stronger after iPad 2.

"All I kept thinking as I watched the presentation today was that Apple just pulled a Secretariat," said John Loughlin, executive vice president and general manager of Hearst magazines, referring to the champion thoroughbred. "They just left their competitors 31 lengths behind."

Viewed from the front, the iPad 2 looks largely the same as its predecessor, aside from the addition of a small camera. It comes with a white as well as black front, and with and without 3G wireless service provided by either AT&T Inc. or Verizon Wireless in the U.S. Unlike some rival tablets, the new iPad cannot connect to high-speed 4G cellular networks.

Apple will also sell a new cover that snaps to the side of the device with magnets and comes with cloth on the inside that can help clear smudges off the glass screen.

The company also showed a new version of its mobile operating system and other internally developed software, including a version of its music recording program Garage Band.

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• Apple Tries to Stay Ahead of Rivals

Analysts, in particular, praised the iPad 2's design, which is thinner than the current iPhone and 15% lighter than the original iPad, shrinking from 1.5 pounds to 1.3 pounds. Those changes could make the iPad more portable and appealing as a reading device for books and periodicals.

What's under the hood of the iPad 2 could also be important, illustrating Apple's unusual role as both designer and user of chips. The new A5 chip in the iPad 2 adds a second calculating engine--an aid in doing multiple computing chores at once- plus a big increase in graphics circuitry that could inspire game developers.

"Games push the limits of devices as hard as any applications can," said Travis Boatman, a senior vice president for the EA Mobile division of Electronic Arts Inc. "Faster hardware is going to make it a better games experience."

It was the appearance of Mr. Jobs at the event that stirred the strongest reaction of the day. The Apple chief has struggled with health problems since having cancerous tumor removed from his pancreas in 2004, and in January handed day-to-day control of the company to Chief Operating Officer Tim Cook.

Associated Press

Apple CEO Steve Jobs speaks at an Apple event March 2.

Appearing in his standard black turtleneck and jeans, Mr. Jobs looked gaunt, as he has in recent years. But he was energetic, with no visible diminishment in the enthusiasm he has long shown when introducing new products.

Gene Munster, a Piper Jaffray analyst, called Mr. Jobs' appearance at the event "huge," saying investors have worried about the CEO's health, especially after the recent publication of paparazzi photos of a withered-looking Mr. Jobs.

"I think he sent a statement that he's really in charge and an active part of this," Mr. Munster said. "It was a big surprise."

Apple shares, which had been flat, moved higher after Mr. Jobs appeared on stage. The stock ended the 4 p.m. Nasdaq session up less than 1% at $352.12.

Mr. Jobs made no reference to his health issues Wednesday, focusing strictly on the iPad 2. "We've been working on this product for a while," Mr. Jobs said shortly after he took the stage, "and I just didn't want to miss today."