Apple Expected To Unveil New iPad As Tablet Wars Heat Up

Has the tablet revolution run out of steam?

Three years ago, Apple unveiled the first iPad, which had a bigger impact than anyone could have imagined. PC and laptop sales have been dropping, and for the first couple of years, sales of iPads regularly eclipsed the most optimistic estimates.

But as Apple prepares to announce new versions of its iPads today, analysts are increasingly pessimistic about the outlook for growth in tablets.

LIVE UPDATES: Apple announcement -- iPad, Mavericks OS X, more

The bottom is certainly not falling out. But it appears analysts believe the era of furious growth for tablets, and the iPad in particular, are over. 

The drama coming out of Apple's event on Tuesday is whether the new version of the big iPad and the iPad Mini can supercharge growth again.

"It sounds jaded, but tablets are a maturing market: We expect few surprises in this category that Apple kick-started only three years ago," said Forrester Research analyst Sarah Rotman Epps. "It will be difficult for Apple to move the needle on new tablet sales, as the strongest growth is coming from emerging markets where customers are more price-sensitive."

This is a big shift for the iPad. When Steve Jobs first displayed the device on stage in early 2010, there was a bit of head scratching. It's nice, but who is going to buy the darn thing?

Turns out, plenty of people. In 2012, Gartner says about 120 million tablets were shipped. The growth had been tremendous. And as a result, other tech companies like Microsoft and Intel and Dell and Hewlett-Packard, which built their businesses on Windows machines, found themselves blindsided and scrambling to respond.

GUIDE: Where to sell old iPads before new ones are announced

But this summer, iPad sales showed some cooling. Sales in Apple's third quarter fell to 14.6 million units, down from 19.4 million units the previous quarter and 17 million for the same quarter a year earlier.

Apple will release sales of iPads for its fourth quarter, which ended Sept. 30, Monday when it reports earnings. 

Apple wasn't alone. Worldwide sales of tablets fell overall. And many analysts chalked this up to Apple's decision to wait several months longer than usual before introducing new iPad versions. 

Perhaps. But more recently, as analysts have published iPad sales estimates for the coming years, there seems to be a noticeable lack of optimism. 

Katy Huberty, a Morgan Stanley research analyst, projects that sales of iPads for fiscal 2013, which ended in September, will generate $31.4 billion in revenue. By 2016, she projects iPad revenue to grow to only $33.9 billion. 

That's not bad for a business that didn't exist four years ago. But after growing 83% in 2011 and 71% in 2012, it's still a big comedown to see growth fall into single digits, even if it is from a much larger base.

Part of the issue at the moment is that with introduction of the iPad Mini, Apple's probably cannibalizing a bit of its own revenue growth. 

Ben Reitzes, an analyst at Barclay's Capital, projects that the number of overall iPads sold annually will increase by just 2% in the fiscal year ending in September 2014. 

In a note to clients, Reitzes worried that Apple is becoming increasingly dependent on iPhone revenue. Even with the iPad's success, the iPhone has grown from 42% of Apple's revenue in 2011 to a projected 53% of revenue in fiscal 2013. If iPad sales growth continues to slow, that concentration will become even higher.

"We believe one of Apple's big issues right now is that it is considered a 'one product' story again,” Reitzes wrote in August.

Perhaps because of this growing skepticism about the iPad's future prospects, Cantor Fitzgerald analyst Brian White says there is a lot riding on the iPad announcements Tuesday to show that consumers are still eager to snap up new versions of the devices.