The Herald Bulletin

Morning Update

Nation & World

October 30, 2013

iPads face toughest holiday competition yet

(Continued)

NEW YORK —

Mainelli said that despite the competition he expects Apple to post a year-over-year increase in iPad sales for the fourth-quarter, predicting that the slimmed down nature of the iPad Air will be a big draw for consumers who complained in the past about the iPad's weight. If Apple does lose market share during the holiday season, Mainelli said, the amount will be tiny and of little consequence to the company's bottom line.

"We're all guilty of this, of looking at Apple's market share and saying: 'Are they in trouble?'" Mainelli said. "But the reality is they're going to have a real good fourth-quarter, they're going to have great average selling prices compared to their competitors and that's going to be great for their profits and great for the Street too."

Cook in his comments Monday emphasized that his company isn't just focused on how many iPads it sells in comparison to its rivals, saying that Apple also looks at things like customer loyalty and usage rates.

Mainelli 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 U.S. holiday tablet sales to be up 21 percent 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.

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