Next AAPL iPad Faces Stiff Tablet Competition

AMZN, GOOG and others keep digging into market share

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Next AAPL iPad Faces Stiff Tablet Competition

The Nexus 7 also features a fast quad-core processor, slimmer design and a $229 starting price. Even the most expensive version, complete with LTE connectivity comes in at just 20 bucks more than Apple’s cheapest WiFi iPad Mini.

Samsung

Samsung is on a tablet tear heading into the holidays. While it risks confusing the heck out of shoppers with a dizzying array of devices (26 different models are featured on its U.S. website), Samsung’s tablet sales surged 227% over last year.

As a vendor, it’s second only to Apple, and with Android now in a dominating lead for tablet OS marketshare, Samsung is front-and-center for many consumers. It offers tablets ranging in size from 7-inches to 10.1-inches, as well as phablets. And like Microsoft (MSFT), it’s offering up to $300 to anyone who turns in an existing mobile device for a new Samsung tablet.

Microsoft

Speaking of Microsoft, the company has new Surface 2 and Surface Pro 2 tablets for sale. Windows 8 may be a niche player in the tablet market, but it’s now at 4% after growing an impressive 527% since last year.

I wouldn’t get too excited, though. The majority of Windows tablet sales have been the Surface Pro variety — an expensive, heavy, laptop replacement that runs Windows 8 and is favored by businesses. Consumer-targeted Windows RT tablets have been a disaster. A smaller, cheaper version isn’t expected to arrive until next year. Don’t expect to see a lot of $449 Surface 2 tablets leaping off store shelves this holiday season, even with Microsoft offering a trade-in bounty on old iPads.

What’s Next for the Tablet Market?

Look for a veritable frenzy over the next few months. Amazon, Samsung and Google are likely to have killer holiday quarters — more so if that new iPad Mini has the same old display or a Retina version is in limited supply (as has been rumored).

In the longer term, with Apple seemingly determined to retain its margins, the iPad is destined to repeat the iPhone’s trajectory. Apple may have had a 95% stranglehold on the global tablet market just three years ago, but it’s now down to a third of that level and slipping. Android tablets could well hit the 80% level Android enjoys in the mobile space. As more consumers opt for a single device instead of buying both a smartphone and a tablet, Samsung’s phablet offerings put it in a strong position there as well. Windows RT, on the other hand, seems doomed to join BlackBerry’s (BBRY) PlayBook tablets in the also-ran category.

But unless Apple shows us something truly revolutionary with its next iPad, the tablet market isn’t looking so bright anymore.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/10/can-new-ipad-keep-apples-tablet-business-sliding/.

©2014 InvestorPlace Media, LLC

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