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iPads face tough holiday competition

  • An Apple employee holds up the new iPad Air on Tuesday, Oct. 22, 2013, in San Francisco. Apple unveiled a new, thinner, lighter tablet called the "iPad Air" along with a slew of new Macs Tuesday at an event in San Francisco. The iPad Air weighs just 1 pound, compared with 1.4 pounds for the previous version. (AP Photo/Marcio Jose Sanchez)

NEW YORK — Apple CEO Tim Cook believes Santa's sleigh will be loaded with iPads this Christmas, but a variety of competing tablets are sure to be along for the ride, too.

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

Apple is expecting strong sales of both models —so much so that Cook told analysts during the company's most recent earnings conference call that "this is going to be an iPad Christmas" as he predicted year-over-year growth.

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 quality —and often cheaper— alternatives that run Google's Android operating system.

According to data released by market research firm IDC on Wednesday, 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.

Tom Mainelli, IDC's research director for tablets, noted that Apple faced tough year-ago comparisons because it released a new iPad during the second quarter of 2012, which caused its sales to spike in both the second and third quarters of that year.

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.

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.

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