Apple is upgrading its iPad lineup to fend off a growing list of competitors, which are introducing their own tablets at lower prices with snazzier features.
Chief executive officer Tim Cook will debut a high- definition iPad mini and a thinner iPad at a San Francisco event tomorrow. Facing two straight quarters of declining profit and a stock that's down by more than a quarter from a September 2012 record, Apple is facing a similar challenge with the iPad as it has with the iPhone, battling lower-cost rivals and proving that incremental changes to existing products are enough to draw customers.
The iPad is Apple’s second-best selling gadget after the iPhone and the new models will be critical as the company seeks to reignite growth. “Tablets are a maturing market,” said Sarah Rotman Epps, an analyst at Forrester Research in San Francisco. “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.” Apple saw its share of the tablet market contract to 32 per cent in the second quarter from 60 per cent a year earlier, according to researcher IDC.
iApple’s success in navigating the trend it triggered with the debut of the iPad will depend on whether it can fend off the growing number of tablets based on Google’s Android mobile operating system, similar to how Android smartphones chipped away at iPhone’s lead, according to Neil Shah, research director at Counterpoint Research. “Apple is getting into exactly the similar situation as with iPhone for its iPad,” Shah said. “It’s Apple against thousands of Android vendors.”
While iPad sales more than doubled every quarter since the 2010 debut, growth of the devices hasn't topped 66 per cent since mid-2012. Trudy Muller, a spokeswoman for Apple, declined to comment ahead of the event. Cook has said market-share data alone isn't the best way to judge success. "Customers continue to love their iPads," Cook said in July, citing data from analytics firm Chitika showing that that the iPad makes up 84 per cent of Web traffic from tablets.
Samsung Electronics, Asustek Computer, Lenovo Group, Acer and other competitors are challenging Apple, offering devices with prices starting at less than half of the iPad mini's $329.
Amazon. com introduced a new Kindle Fire lineup last month with higher-resolution screens at prices starting from $229. While tablet shipments doubled to 166 million globally in 2012, Counterpoint Research projects that the growth rate will slow to 28 per cent in 2014, to 301 million units.
Bloomberg
