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By: Wee Teck Loo

Apple Inc sent out an invitation to a press event on 22 October 2013 with the tagline “We still have a lot to cover”. The general consensus is that the Cupertino-based company will unveil new versions of its full-sized iPad and iPad Mini. The new iPad should inherit the processor used on the iPhone 5S smartphone and sport a thinner bezel. The new iPad Mini is likely to draw inspiration from the iPhone 5C, offering an array of colour options.

Apple.jpg

Source: Apple Inc

Buying Some Love

The timing of the new iPad launches coincides with the critical year-end holiday season. The short two-month shopping spree easily accounts for more than 40% of retailers’ and manufacturers’ annual revenue. The new iPad Mini, being one of the cheapest Apple products at US$329 (£269), is a highly desirable gift for family members or close friends. John Lewis Partnership Plc (John Lewis), a UK-based retailer, expects the new iPad Mini to be the company’s best-selling electronics product this Christmas. If Apple decides to offer a gold-coloured iPad, the model should be extremely popular, judging from the success of the gold-coloured iPhone 5S. The non-contract price of an iPhone 5S is US$649 but in the grey market a gold-coloured iPhone 5S can fetch 50%
more than its retail price.

Unable to Buy the Market

Retail sales of tablets are set to overtake those of laptops in 2013 to become the most popular portable computer among consumers, with sales exceeding 143 million units. As the market moves into 2014, global  retail sales of tablets are forecast to grow by a further 20% compared to the previous year. In key researched markets, however, iPad sales are only forecast to grow by 3% in absolute terms over 2013/2014 as the company focuses on maintaining its profit margins. Faced with an onslaught of low-priced tablets running on both Android (51%) and Windows (11%) operating systems, iPads are only expected to garner slightly more than one third of the tablet retail volume market in 2014.

Tablets by OS – 2014

tablet-market-share-breakdown-by-operating-system

Source: Euromonitor International

Note: Retail volume sales based on 46 researched markets

Managing Expectations

While Apple’s market share globally was 84% in 2010, it is unrealistic to expect the company to continue to dominate the tablet category come 2014. The market is being flooded with new entrants every month, with even retailers like Argos and Tesco (both from the UK) offering their own branded tablets, aiming to drive revenue for their stores, much like Amazon’s Kindle.

Both the iPad and iPad Mini are higher in price than comparable models from competitors, which translates into significant profit margins. In sum, the next generation of iPad and iPad Mini will help Apple consolidate its market position and reinforce its status as a premium brand.

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