Why Apple Will Win the Tablet Battle of the Holiday Season
Apple’s newly introduced iPad Mini and 4th generation iPad are seen during Apple’s special event at the California Theatre in San Jose on October 23, 2012 in CaliforniaApple unveiled a smaller version of its hot-selling iPad on Tuesday, jumping into the market for smaller tablet computers dominated by Amazon, Google, and Samsung. The iPad mini’s touchscreen measures 7.9 inches (20cm) diagonally compared to 9.7 inches(24.6cm) on the original iPad. (Image credit: AFP/Getty Images via @daylife)
As I wrote in a previous piece, I expect Apple to lose the tablet war, as the market becomes increasingly crowded and fractionated. But not so fast, not this holiday season.
Apple continues to maintain its competitive edge for three reasons:
First, consumer hype is still on. In spite of the sizable drop of Apple’s stock in recent weeks, the company’s products continue to enjoy an aura among consumers, which fuels word of mouth and buzz. Apple doesn’t have to wait for Black Friday to have crowds line up to buy its products. They do it every day.
Second, Apple’s tablets continue to beat the competition in quality and applications, according to Consumer Reports. “ The breadth and quality of Apple’s app market is still a major competitive edge for the iPad.” Apple’s iPads, for instance, rank at the top in the 9 to 10-inch tablet market, because of a superb screen and long battery life. However, Samsung, Google(NASDAQ:GOOG), and Amazon (NASDAQ:AMZN) offer the best value in the 7-inch tablet market when purchased at Best Buy (NYSE:BBY). Games for iPad, for instance, are still more innovative than the competition, according to Consumer Reports.
Tablets for the Holiday Season: Apple versus the Competition
|Best 9-TO 10-ich Tablets||Best Values in 7-inch Tablets|
|Apple $630||Samsung $350|
|Apple $500||Google $250|
|Samsung $500||Amazon $210|
|Apple $400||Samsung $210|
Source: December Consumer Reports, p. 28.
Third, Apple has a good network of stores, where consumers can see and experience the product, feel a sense of ownership that makes it irresistible to leave the store before buying the product. That could explain why Apple’s stores are so profitable. According to a recently published study, Apple’s stores have the highest sales per square foot, $6,050, twice the sales of Tiffany & Co(NYSE:TIF), and more than three times the sales of Coach (NYSE:COH).
The bottom line: Apple will eventually lose the tablet war, but it will still win the holiday battle.