As iPad Air goes on sale, rivals take a bite out of Apple

By Kirstin Buick
31 October 2013

Apple believes Santa's sleigh will be loaded with iPads this Christmas -- but a variety of competing tablets are sure to be going along for the ride.

The American company is expecting record sales  -- so much so that CEO Tim Cook predicted that "this is going to be an iPad Christmas" during a recent earnings conference call.

Apple's iPad Air, a thinner, lighter and faster-running version of its previous large tablet computers, goes on sale this week in the US with a starting price of $499. The company also unveiled an updated version of its iPad Mini recently, which will go on sale sometime in November.

But this year the iPad faces its stiffest holiday season competition since its 2010 introduction. While Apple still holds the largest chunk of the growing tablet market, the iPad has been losing market share to cheaper alternatives that run Google's Android operating system.

According to data released by market research firm IDC iPads accounted for about 30 percent of the tablets shipped during the July-September quarter, down from about 40 percent in the same period a year ago.

Meanwhile, Samsung Electronics, Apple's closest rival, saw its market share jump to 20 percent from 12 percent a year ago. Smaller tablet makers such as Asus, Lenovo and Acer also saw big increases, though their shares of the market remained in the single digits.

The overall number of tablets shipped in the July-September period jumped 37 percent from a year ago, driven by a surge in Android tablet shipments. At the same time, iPad shipments rose less than 1 percent.

Tom Mainelli, IDC's research director for tablets noted that because Apple keeps its prices high, it's much more profitable than other tablet makers who try to boost unit sales by keeping prices low. As a result, Apple makes significantly more on each tablet it sells.

Shawn DuBravac, chief economist for the Consumer Electronics Association, said there should be plenty of demand to go around. His group expects US fourth-quarter tablet sales of 40,1 million units, marking a 21 percent increase from a year ago. According to CEA research, about 26 percent of consumers plan to buy a tablet as a gift this year, roughly the same as last year's 27 percent.

DuBravac noted that the tablet market has fragmented in recent years, much like the personal computer and digital camera markets did as they matured. Consumers can now choose from among a wide variety of prices, sizes and options when shopping for a tablet, which boosts overall interest in the products, he said.

iPad competitors set to hit the market this month include Samsung's Galaxy Note 10.1 - 2014 Edition, which is one of the few that costs more than the iPad Air. Its 16 gigabyte version starts at $550. But Amazon.com's Kindle Fire HDX, which like the Samsung tablet runs on the Android operating system, starts at $299. – Sapa-AP Share your thoughts:

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