Apple Inc. (AAPL), Google Inc (GOOG): Will the Next iPad Mini Get a Major Update?

Given his “fairly solid track record in predicting Apple Inc. (NASDAQ:AAPL)‘s product plans,” according to MacRumors‘ Eric Slivka, KGI Securities analyst Ming-Chi Kuo is worth listening to. In a new report, Kuo outlines a detailed product road map for Apple’s new iPad line-up. Though the road map is interesting, it’s the major overhaul for the iPad Mini that steals the spotlight.

iPad Mini. Source: Apple.

A major update for the iPad Mini
Before the end of this year, Apple Inc. (NASDAQ:AAPL) plans to launch both the iPad 5 and the iPad Mini 2, Kuo claims. An upgrade to a Retina display, as Kuo mentioned, would mark a major improvement — but Apple isn’t stopping there. Kuo believes both iPads will run on the new A7X chip.

With upgrades like this, the iPad Mini 2 would offer consumers a whole new value proposition. Before, the iPad Mini used the A5 chip — also used in the iPad 2 and the iPhone 4S. But an upgrade to the chip that leaps three generations of iPads really sets the tablet apart from its predecessor.

When the iPad Mini first debuted, some criticized it for using a chip that was already previous-generation, presumably to save on costs. If Apple Inc. (NASDAQ:AAPL) puts in a brand-new A7X with beefier graphics horsepower to drive the Retina display, it will silence the critics.

The pressure
Before 7-inch tablets hit the market, Apple Inc. (NASDAQ:AAPL)’s 9.7-inch iPad was considered the standard size for tablets. Those days, however, are long gone.

Apple Inc. (NASDAQ:AAPL) responded to 7-inch tablets with the 7.9-inch iPad Mini. IDC estimates that in 2013, sub-8-inch tablets will make up 55% of tablets sold worldwide.

Meanwhile, Apple Inc. (NASDAQ:AAPL)’s only product in this category lacks both the Retina display and faster chips of its larger counterpart. Both Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) boast sub-8-inch tablets with HD displays. The iPad Mini is quickly falling behind and the company is feeling the pressure.

Apple Inc. (NASDAQ:AAPL)’s pressure from competition is especially evident in Kuo’s comments regarding the company’s decision to accelerate the roadmap for the iPad Mini with a retina display.

But we now believe that iPad mini 2 may be pulled in for launching in late 2013. Since other brand vendors are all expected to have a line-up of new high resolution 7-8″ tablets to launch over the next 3-6 months, we think iPad mini 2 may lose its opportunity in the market if it is slated for introduction next year.

Despite minimal form factor differentiation and unchanged casing colors, we think the retina display will still boost iPad mini 2’s attractiveness. Although the model’s availability is small due to production issues, if iPad mini 2 gets an introduction and launch this year, it should be able to impact consumers and freeze their budget for other brand vendors’ tablets.

There had been prior reports that Apple Inc. (NASDAQ:AAPL) was potentially facing delays on the Retina iPad Mini, and investors can rest easier now that the device appears slated for a 2013 launch.