Well it runs at 30-40 FPS on my laptop which is much, much more powerful than your iPad 3. So I guess there is something wrong with the optimizations, but I believe thats just the case with the early build.
This is quite important if you missed it from the docs on performance guidelines for mobile devices: “Make sure most post process features are disabled. In fact the only ones you can use for iPad4 are Temporal AA and the Film ones, including vignette. A bunch of expensive features like Bloom and DOF are enabled by default as we have the same settings between PC and mobile. Post features can easily cost 60+ms with the default settings. We hope to be able to use Bloom, DOF and light shafts on higher end devices. show postprocessing can be used on device to toggle PP and see how much it is costing.”
There are a number of reasons for this. If you look at the tech specs from iPad 3 → iPad 4, there’s a stark difference. This is mostly because the iPad 3 can barely handle the graphical expense of the retina display, and the fact that its not a whole lot more powerful that the iPad 2. Even if UE4 doesn’t push content at a “native” retina resolution, it still has to be powered by hardware that unfortunately is quickly obsoleting itself (a why the iPad 4 was released so quickly after the 3).
Asking 60 FPS on any mobile device running 3D games built in an engine, running more expensive shaders is bit of an unreasonable expectation, except maybe in menus. Every non-native, engine built game (Unreal, Unity, etc) that I’ve ever worked on, we lock the framerate at 30. This also seems to be standard with other mobile development studios as well.