Apple May Trounce Rivals With Smaller iPad: Analysts

By webadmin on 10:17 am Jul 06, 2012
Category Archive

Apple, which is expected to launch a mini version of its market-leading
iPad tablet, could quickly overpower its rivals in the segment with the
addition of the new product, analysts say.

The launch expected
later this year however would probably prompt Apple co-founder Steve
Jobs to roll over in his grave, given that the late technology pioneer
ridiculed the small-screen tablets offered by his competitors.

Jobs
once said the seven-inch screens for mini tablets should
“include sandpaper so users can sand down their fingers” to be able to
use onscreen keys.

But analysts say the market has changed since Jobs died last October.

Amazon’s
Kindle Fire proved popular last year, and the small-format Google Nexus
7 joined the Samsung Galaxy in the hot tablet market, dominated by the
iPad, which has a screen of nearly 10 inches (24.6 centimeters).

Rumors
about the smaller iPad have been swirling for months, but the Wall
Street Journal reported this week that Apple’s component makers in China
are gearing up for mass production of the device.

“Despite what
Steve Jobs claimed, the seven-inch form factor is popular and very
useful if you want true portability,” said analyst Jack Gold at J. Gold
Associates.

“Also, seven-inch is less expensive and so they can compete for the lower end of the tablet market.”

Analyst
Tom Mainelli at research firm IDC said Apple has discovered that larger
tablets are not universally popular, noting that users in Japan “with a
more mobile culture” may prefer a smaller format, which also may be
better for education in primary schools.

If Apple sells the new device at less than $300, as widely expected, Mainelli said, “they put a hurt on all Androids.”

Mainelli
said that a mini iPad “ultimately grows the market,” and that Apple
does not appear to be perturbed by others in the field, since it makes a
profit on the devices, unlike some other manufacturers.

Andy
Hargreaves, an analyst at Pacific Crest Securities, said in a note last
week that he expects Apple will sell 35 million iPad mini units in the
coming year at $299, “with 25 percent cannibalization of the larger
iPad.”

“Apple is a approaching a tremendous period of product
cycle strength, with anticipated launches of a new iPhone, a 7.85-inch
iPad and a refreshed 9.7-inch iPad that are likely to drive strong
profit growth and corresponding stock appreciation,” Hargreaves said.

Among
the many reports circulating was one on the Apple tracker blog iMore,
which said a new 7.85-inch iPad would come with “aggressive” pricing at
$200 to $250.

This would “do to the tablet market what Apple did
to the MP3 market in 2004 with the expansion of the iPod product line –
leave absolutely no space for competitors,” a blog post by Rene Ritchie
said.

Apple shares rose 1.76 percent to $609.94 on Thursday, and
Hargreaves upped his price target on the company to $690 per share.
Another analyst, Brian White at Topeka Capital markets, raised his
target price for Apple to $1,111.

Apple held 65 percent of the market in the first quarter with 11.8 million iPad shipments, according to ABI Research.

The market leader, however, faces tougher competition as Samsung, Amazon, Microsoft and Google roll out competing devices.

Analyst
Rob Enderle of Enderle Group said that now that the new, smaller format
has proven popular, “I don’t think Apple has any choice but to go into
this segment.”

He said the new Apple device “will both
cannibalize 10-inch (iPad) sales and broaden the market but it will also
give Apple a line of offerings in what, prior to Apple, was not a
one-size-fits-all world.”

Enderle said Apple is in a fierce
battle with Korean rival Samsung across several product lines including
tablets and smartphones, and this is forcing the Cupertino-based giant
to adapt.

Apple executives are also likely to introduce a larger
screen for its popular iPhone to compete with those using the Google
Android operating system, according to Enderle.

“Their tardiness
in moving to four- and five-inch phones has dropped them well off the
smartphone leadership position they once owned and has been handing that
market to Google, they shouldn’t repeat that mistake here.”

AFP

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