As Apple (NASDAQ:AAPL) rolls out the new iPad Air and the iPad mini, there is a recurring thought that I have had while observing the changing mobile market. Is there a greater strategy to the inclusion of LTE as an option in iPads and not in the Mac Air or Mac Book Pro? If there is a strategy then where is Apple leading us to if as I suspect it becomes the new hub of mobile computing. This hub is different from the idea that the PC or iMac is at the center of our home compute environment allowing us to create documents and being a repository for all of our digital creation. The new LTE hub is always accessible leading to a new level of productivity.
As I got off the plane this past week in Mexico I was greeted with the obligatory message from AT&T (NYSE:T) on my iPhone that the cost to make a call or access my email would be exorbitant. No worries, I bypassed the hassle and used my local salesman's phone as a hotspot to ensure I was up to date on the company email and to access the internet. Are there similar analogies for "hotspotting" in remote parts of the US and even in the corporate office? I believe so.
In a previous article, I mentioned how Apple appears to have developed the slow carrier roll out model across the world in order to not only sell the phone on their terms and at their price but also to set a level competitive playing field that would eventually commoditize the carriers' profit streams as each one competed for the same customer in a locked in a data plan. The holiday season would be the high time to roll out $0 sign up offers, if a user agreed to be a customer for two years. But what about the iPad Air? How does it fit in to this strategy? For carriers there must be an accounting of how to subsidize tablets or to account for data plans that are different than what exists for smartphones.
In the 1990s, when the mobile PC finally dropped to under 8lbs and could fit in a brief case, the adoption rate relative to the desktop was quite low and remained so as long as the communication connection was with a modem or an Ethernet port. Essentially we were tethered in order to perform out work. WiFi in the late 1990s and the turn of this century vaulted mobile PCs past desktops as the preferred, majority volume platform because we could use them productively anywhere in the building with our colleagues. We were all connected to the internal company server.
Now with LTE, we have the beginnings of a mobile Hub that works anywhere providing the connections to the internet, email or through a virtual network back to the home office. With one tablet opened up and tented in a room with colleagues there can be a centralized Hotspot that remotely links to the Cloud or to any internet site. Data aggregation likely increases as all access one hotspot, trying to leverage better download costs from the carrier. With the iPad operating beyond 10 hours on a battery charge, the unit itself is much more valuable than a PC attempting to do the same running far fewer hours.
If LTE becomes the key selling factor in mobiles into corporate and along with the free iWorks suite entices companies to move towards iPads and away from Mobile PCs (including ultrabooks), then one has to wonder why Intel (NASDAQ:INTC) did not make an early baseband push like they did with WiFi in the Centrino platform of 10 years ago. WiFi actually increased Intel's mobile processor prices and drew the market away from the more commoditized desktop PC where AMD (NYSE:AMD) was a greater threat. If Intel started their push into baseband years before the purchase of Infineon (OTCQX:IFNNF) and encouraged the market to start seeding it into high end PCs, then they would have been able to use it as the core central building block with which they could have migrated into the tablet and smartphone markets in a timely fashion, holding down the fort until the Atom processor was able to catch up on the applications side.
In the mobile market, where nothing stands still, expect a flurry of new tablets and mobile PCs that contain a variety of features that match up to Apple, however the hub or hotspot that is LTE may be the technology that serves as the bridge that encourages the PC market to cross the chasm to the more productive iPad platform, even if it happens to be lower in performance.
Disclosure: I am long AAPL, INTC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.