Take two tablets: Will the iPad Air and Retina iPad mini cure Apple's market share slide?

Apple put up some impressive numbers today: 170 million iPads sold to date. 475,000 iPad apps available. $13 billion paid to app developers. Yet those numbers only tell part of the story. While the iPad may continue to be the top-selling tablet line, it no longer dominates the market the way it once did. A year ago, 60 percent of all tablets sold were iPads, according to numbers from IDC. By this summer, that number was down to 32 percent, with Android models soaring from 38 percent to 63 percent. Even Windows models jumped from just 1 percent of the market to 4 percent -- and that was before Microsoft slashed the prices of older Surface models and released its second-generation tablets.

Make no mistake about it: People are buying tablets. Lots of them. According to the Pew Research Center, 35 percent of Americans now own tablets, up from 25 percent last year. Gartner expects 184 million tablets to be sold this year, and 263 million next year. So why is Apple, the company that made the tablet an object of desire, no longer the dominant player in the category it helped create? Quite simply, it's because Apple, despite all of its successes, its massive market cap and its incredible influence over the marketplace, sells, well, objects of desire -- beautiful, well-made products that lesser competitors can only envy. Apple is an innovator, a creator of products that set the tone for the rest of the market. But it doesn't do as well in categories where it faces competitors that are willing to sacrifice margins for market share, or cut corners to reach more customers.

Apple will sell a lot of $499 iPad Airs and $399 Retina iPad minis. But Samsung, ASUS, Amazon and a host of companies you've never heard of will sell even more of their less-expensive Android tablets. Will they carry the same cachet as the new iPads? No. Will some major apps never make their way to these Android devices, or show up only in less-refined (or "stretched out," in the words of Apple CEO Tim Cook) versions? Yes. Will some of these budget tablets be so cheaply manufactured that they'll barely be worthy of the name "tablet"? Most definitely.

But they'll sell, in the millions, just as low-end smartphones have. That's good for consumers, but it's a challenge for Apple, which managed to build the iPhone market on the foundation of the iPod, and leveraged the iPhone to establish the iPad. The iPad Air and Retina mini are, by all accounts, beautiful, elegant, very capable devices. However, with no new product category making its debut today, Apple is going to face continuing declines in market share, even as the tablet market booms.

Source: http://www.engadget.com/2013/10/22/take-two-tablets-cure-apples-market-share-slide/?ncid=rss_truncated
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