Apple Revamps iPad Lineup - Analyst Blog

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In a bid to strengthen its competitive position, Apple Inc. ( AAPL ) refreshed its full product lineup for the upcoming holiday season. After releasing iPhone 5S and 5C in September, the company recently upgraded its iPad product lineup, which will not only help it to woo existing customers but also attract new ones.

The refreshed iPad lineup comes with additional features, is thinner, lighter and powerful compared to its predecessors. The new full-size tablet called iPad Air has a faster processor, offers a better resolution and display and is priced at $499.  Apart from iPad Air, the company also launched a refreshed iPad Mini with retina display and 64-bit desktop class architecture used in iPad Air.

Previously, Amazon.com Inc. ( AMZN ) has been instrumental in bringing down the price of tablet devices such as iPad, by introducing low cost tablets starting at $229. Therefore, it is a smart move by Apple to competitively price its new iPad, which will help it to withstand competition from other players.


Moreover, Apple also announced that it would provide free access to its iWork productivity suite, which competes with Microsoft Corp. 's ( MSFT ) Office applications. Moreover, the new device from Apple comes with iLife photo, movie as well as music making apps.

Apple's iPad witnessed year-over-year volume growth of 28.6% during the first nine months of fiscal 2013, whereas the introduction of the lower priced iPad Mini boosted iPad revenues by 8.32% compared to the year-ago period. Although, iPad Mini is a lower margin product, it has kept the sales momentum intact for the iPad.

The company will start selling the iPad Air early in November, while iPad Mini will be available later in the same month. Apple is doing it to strengthen its grip in the tablet market as industry experts believe that the company might lose some of its market share to other competitors.

As per industry research firm IDC, although Apple iPad may continue to be the top-selling tablet, its market share has declined from 60% in the year ago period to 32% this summer. Moreover, Android-based tablet sales soared from 38% to 63%. This apart, Windows-based model is also witnessing a good jump.

Competition from companies such as Nokia Corp. ( NOK ) and Samsung have also affected the growth prospect of the company.

We believe that this completely refreshed product lineup will help the company to improve its top-line growth going forward. However, Apple is known for its innovations and the lack of a completely new product will remain an overhang on the stock in the near term.

Currently, Apple has a Zacks Rank #2 (Buy).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AAPL , AMZN , MSFT , NOK

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