When Apple reports its fourth-quarter earnings later today, there will be a lot of big numbers bandied about: tens of millions of iPhones, iPads and Mac computers sold, and no doubt record profits. Although the shadow of former CEO Steve Jobs' passing will add some sobriety to the affair, there's little doubt that Apple will have a lot to feel good about.
With the last quarter in the books, attention will shift to the upcoming holiday season, and when Tim Cook gets on the call today, he'll shed some light on what the company expects in the last three months of the year. Will Apple be able to keep its unprecedented winning streak going into the upcoming holiday season?
Apple's Winning Streak
In at least two categories, the answer is almost certainly yes. The iPhone 4S, which launched last week, has already broken all kinds of records, to the point where customers can now only get it if they make a reservation. And Mac computers just climbed to all-time highs in market share in the U.S. (13.7 percent) and the world (6.45 percent), according the analytics firm Net Applications.
The one category that may be worrying Apple executives—and stock holders—is the iPad. Certainly, the company is expected to report healthy sales of the iPad 2, while the competition is in such disarray (tablets from RIM, Android, and HP have all either struggled or died) they can't even credibly be called rivals. Apple's share of the tablet market was recently clocked at a seemingly invincible 80 percent. However, one looming product has the potential to up-end everything: the Kindle Fire.
Bringing the Fire
The Kindle Fire is priced to sell: It will cost just $200, or $300 less than the cheapest iPad. Although manufacturers have brought tablets to market at that price level before, the Kindle Fire will also be tied into Amazon's entire digital ecosystem, integrating Amazon music store, video content, cloud storage, and of course e-books—all screaming for users' attention from the home screen. The Fire has a smaller screen (7 inches to the iPad 2's 10), but budget-conscious customers in a down economy may see the hardware tradeoffs as worth the $300 savings.If the Fire is as successful as some are predicting, it could put a sizable dent into the iPad's market share. Earlier this year, analysts had predicted Apple would sell between 40 to 60 million iPads this year, but Apple has reported selling sold "only" 13.9 million so far this year. That would mean, between today's earnings report and the next, Apple would need to sell almost 30 million iPads to meet those expectations.
Two-Tablet Market?
Given this is Apple we're talking about, that could very well still happen. Then again, the Kindle Fire may steal Apple's (and everyone else's) Christmas. There’s also a third possibility: the tablet market is so new that it could be there's room for two big tablets. Apple may continue to post record numbers and dominate the high end, while Amazon's Kindle Fire ignites a new kind of customer base who previously thought tablets were a toy they couldn't afford.
Tim Cook will probably field a few questions about the Kindle Fire in today's call, and with a lot of luck he may drop hints about what Apple's response might be (iPad prices slashed? 7-inch iPad next year?). But even if he gives the predictable "no comment," it's a sure bet Apple's keeping a close eye on its new tablet rival, and it'll affect Apple's iPad strategy in the months (and years) to come.
Check It Out
News Source
No comments:
Post a Comment