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Apple's iPad business has been struggling for quite some time, with multiple years of unit declines. To put things in perspective, Apple shipped nearly 68 million iPads in its fiscal 2014; that figure plunged to 54.9 million in fiscal 2015 and then to 45.6 million in fiscal 2016. Revenue, too, has struggled as well, with iPad-related revenues dropping from $30.3 billion in 2014 to $23.2 billion in 2015, and then again to $20.6 billion in 2016. Apple obviously isn't going to give up on this product line, so its best course of action is to continue to invest in building excellent products to try to stimulate demand -- or, more pessimistically, stem the rate of demand declines. Let's take a closer look at what we should expect from these new iPad models, and what they could mean for Apple's iPad business. The cheaper 9.7-inch iPad Today's 9.7-inch iPad offerings consist of the discounted iPad Air 2 and the pricier 9.7-inch iPad Pro. The latter has a faster processor than the former (A9X vs A8X), superior wide-color True Tone display, improved cameras, support for the Apple Pencil, and support for Apple's smart keyboard. Image source: Apple. Previously, KGI Securities analyst Ming-Chi Kuo said that the cheaper 9.7-inch iPad will incorporate an Apple A9 chip manufactured by Samsung (NASDAQOTH: SSNLF). The use of the A9 chip in the low-cost 9.7-inch model, rather than the A9X that's currently featured inside the 9.7-inch iPad Pro, should make the device cheaper to manufacture. Additionally, by using the A9 in the cheaper model, Apple will be able to market a larger performance delta between the low-cost 9.7-inch iPad and the pricier 10.5-inch iPad and 12.9-inch iPad Pro. It will be interesting to see how else Apple de-features the cheaper 9.7-inch iPad to both save costs and encourage upsell to the 10.5-inch or 12.9-inch models. Apple Pencil and Smart Keyboard support seem likely candidates for the chopping block here.
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