In the meantime, Apple can update the iOS. "Given they use a common OS platform, it is likely they will at times refresh the hardware out of cycle with the software," Enderle says, adding, "If they are doing a refresh for a new display and a software update, it isn't like they have a choice if neither is ready yet."

But allowing too much time to pass between iPad hardware releases is a risky move for Apple given more than 80 Android tablets poised to hit the market. Simply put, Apple can't let Android tablets go unchecked without an iPad hardware upgrade.

Even without a higher resolution, an iPad 2 released in the coming months should have some compelling new features. Everyone expects an iPad 2 to have a camera and FaceTime, but Apple can hit it out of the park if the iPad 2 also comes in with more RAM, lighter weight, thinner, and, most importantly, a dual-core processor.

"The Daily is pretty much dog slow," Wiens says, referring to the new electronic newspaper for the iPad sold under Apple's new subscription model unveiled last week. For a dime and a penny a day, The Daily serves up more than 100 pages of original news, lifestyle, entertainment, and opinions, breaking news updates, customized sports pages, videos, interactive graphics, and photography.

"You have to really optimize to get things running fast on a screen that big with a processor as slow as the one in the iPad," Wiens says, adding, "Most of the benefits you'll see from a dual core are having processing in the background. I think iOS's multi-tasking implementation is fairly poor right now."