Rumors about the iPad 3 have been swirling around for months, but things kicked up again today after Blomberg reported that production has begun on the iPad 3 in preparation for a March launch. According to their three sources, the iPad 3 will have a double-resolution “retina” display, a new quad-core CPU, and the mobile data capability will be upgraded from 3G to LTE.

If the report is accurate, these will be welcome, but unsurprising improvements. The retina display debuted on the iPhone 4, a few months after the first iPad shipped. Some hoped it would be a feature of the iPad 2, but there were good reasons it was impractical then.  A higher resolution display is much more practical now and will provide a decisive improvement in the user experience.

I’m not persuaded that a quad-core CPU is essential for a tablet at this date, but it does provide an avenue for improving performance. A faster dual-core CPU would probably provide a greater overall performance improvement, but I don’t know how practical that is. There is a new generation of ARM cores on the horizon that should deliver a big performance boost over the Cortex-A9 cores used in the iPad 2’s A5 CPU, but people don’t expect them to reach mass production until late this year. A big clock-speed improvement with the existing core design could provide a nice boost, and should be practical given the expectation that the new chip will be built on a 28nm process, compared to the 40nm process used for the A5. The long-shot in all of this is that Apple will release their own core design. An iPad with a retina display will demand a faster GPU, but whether this will come from a new design, or be achieved through higher clock-speed and improved memory bandwidth, remains to be seen.

A bump from 3G to LTE is also a logical improvement, as carriers, led by Verizon, seek to recoup their investments in upgrading their networks to LTE. Apple avoided LTE in the iPhone 4s because available chipsets have horrible power consumption, but in the intervening 6 months, bring opportunities for new chips, and, perhaps more importantly, the power consumed by the cellular radio is much less significant on a 10″ tablet like the iPad, where the power consumption of the displays dominate.

What I’m most interested in, though, is something that probably won’t have an answer until the iPad 3 actually ships:

Will customers with 3G/LTE iPad 3s will be able to move them among various mobile carriers?

The iPad 2 had different hardware depending on whether it is a Verizon or an AT&T model.  The iPhone 4s is sold with it locked to a carrier, but the underlying hardware can work with both AT&T’s GSM-based network and with Verizon’s CDMA network. I expect future iPads to be similar to the iPhone 4s, with a single hardware configuration that can work with different carriers, but the iPad is sold without a subsidy, and the GSM iPads have always been unlocked, allowing their use with other GSM carriers.

So, will carriers have to compete month-in-month-out to gain and retain iPad users?  I sincerely hope so.  I believe that the time will come where Apple has to pit the carriers against each other. For the iPhone, that time will likely come in a few generations, when the unsubsidized cost of the latest iPhone model drops to $300 or so. Is this the time for them to make that move with the iPad?