Amazon and Barnes & Noble are using pricing as their main weapon to fight Apple. While Apple's iPad is expected to fetch a premium price, an inexpensive iPad 2 could shift the tablet market.
The Apple iPad
3no matter how blazingly fast its processor or crisp its displaywon't have
Amazon fearing for sales of the Kindle Fire, its $199 tablet that helped to
nearly double the number of American tablet users during the December holiday
season. It's Apple's existing iPads, and what it does to their prices,
Bloomberg
reported March 6, that could have major consequences for competitors that use
pricing as their primary weapon in their fight against Apple.
Apple CEO Tim
Cook is expected to take to the stage of San Francisco's Yerba Buena Center for
the Arts March 7, and introduce the newest Apple iPad. At least, that's what
Apple's detail-light invitation has guests
expecting.
Just as
introducing the iPhone 4S in October,
Apple announced deep discounts to its existing iPhonesmaking
the iPhone 3GS free with a new wireless contract and lowering the iPhone 4's
price tag to $99Cook is expected to announce the new price of the iPad 2. And,
by extension, Cook could alter the fate of the Amazon Kindle Fire and the
Barnes & Noble Nook tablet. Both devices keep hardware pricing low, relying
instead on revenue from the services and software that the tablets tend to
encourage consumers to consume.
Canalys
analyst Chris Jones told Bloomberg that Apple might reduce the iPad by $100,
offering it for $399. It's a price that
could
woo users from the $199 Amazon and Barnes & Noble options, though it wouldn't
mark certain disaster for the latter.
Ovum Principal
Analyst Adam Leach wrote in a March 7 research note that he expects competition
in the tablet space to become more intense through 2012, and not just due to
pricing.
Both Google
and Microsoft, with the introduction of new platforms and growing ecosystems,
are expected to become more proper challengers to Apple, which has essentiallyand
rightly, really, given that it created the markethad the run of the
marketplace.
Google has
finally bridged the smartphone and tablet divide with Android 4.0 (Ice Cream
Sandwich), offering developers a unified platform for the two types of device.
This should increase the number of tablet-optimized applications, which were
notably absent from Android 3.0 (Honeycomb)," Leach wrote in his note.
Leach added
that Microsoft is set to launch Windows 8 this yearwhich, able to easily
switch between a modern look and an old-school option,
is expected to appeal to longtime Microsoft usersalong
with its Metro user interface and a build specifically for ARM-based chipsets.
"Microsofts
introduction of Windows 8 on ARM and its shift away from Intel for tablets will
drastically increase the companys ability to compete on price point and user
experience with Apple," added Leach.
That said,
chipping away at a market leader takes time, and Ovum expects that Apple will
hold firm to its market-leading position in the growing tablet space through
2012.
By 2016, Leach
adds, Ovum expects the market for "tablet and other mobile Internet
devices to exceed 235 million units."
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