Which will win the tablet wars/School Districts Grapple With Glitches in Computer Tablets

School Districts Grapple With Glitches in Computer Tablets

Apple, Nokia and Microsoft each introduce new tablets tomorrow. Which will win the tablet wars?

Tablet Makers Gear Up for Latest Skirmish www.nytimes.com
‎The intense competition in the market for tablets will be highlighted on Tuesday, as Apple, Nokia and Microsoft each introduce new devices.‎




Apple Adjusts Tablet Strategy
Company Is Expected to Unveil New iPads on Tuesday


By
Daisuke Wakabayashi and
Ian Sherr connect

Updated Oct. 20, 2013 6:11 p.m. ET








Tablets are now Apple's second-biggest source of revenue after the iPhone. Pictured, customers in an Apple store in Tokyo. Bloomberg News

Apple Inc. AAPL +0.68% 's Mini is a big draw, for consumers and rivals.

The iPad Mini—a 7.9-inch version of its more-expensive sibling—is the world's best-selling tablet computer, and is estimated to account for nearly two of every three iPads sold. The smaller-screen tablet that Steve Jobs once said would be "DOA, dead on arrival" now plays a central role in the company's strategy for the post-PC era.

Apple is expected to unveil a new batch of iPads on Tuesday, as a number of rivals looks to chip away at its lead. Samsung Electronics Co. 005930.SE +0.07% is flooding the market with an array of screen sizes and options. Amazon.com Inc. AMZN +0.12% is undercutting Apple on price, while Microsoft Corp. MSFT +0.09% aims to use its corporate connections to tap a new segment of the tablet market.









Apple is expected to unveil the next generation of iPads this week but its market share has declined. The WSJ's Juro Osawa speaks with Richard Kramer, managing partner for Arete Research, about what Apple needs to do to stay no. 1.

Last year, Apple slowed the competition's momentum with the smaller and cheaper iPad Mini—a nod to shifting consumer preferences that some analysts and investors say Apple largely missed in smartphones.






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Apple is now readying a revamped iPad Mini with a high-resolution "retina" display. It's also working on a thinner, lighter version of its standard 9.7-inch iPad, using a thin film instead of the glass found in existing models, based on information from the company's parts suppliers.

An Apple spokeswoman declined to comment.

The new iPads come at a critical moment. Tablets are now Apple's second-biggest source of revenue after the iPhone, bringing in nearly $26 billion in the nine months ended June 30. But Apple sold fewer iPads in the three months ended in June than the same period a year earlier, the first time that had happened since the device appeared in 2010.

Research firm Gartner expects Apple's share of the tablet market to fall below 50% this year, from 65% in 2011. Competitors are starting to squeeze the Mini with larger-screen smartphones, so-called phablets that bridge the gap between smartphones and smaller tablet computers. Meanwhile, tablet prices are steadily declining, further pressuring Apple to engage in the type of price competition that it has avoided historically.



Tablet Wars

See how some of the more popular tablets stack up.






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"It will become harder to sell to new customers where price is important, and Apple doesn't compete on price as much," said Sarah Rotman Epps, an analyst at Forrester Research Inc.

South Korea's Samsung is mimicking in tablets the strategy it used to grab market share in smartphones: covering the spectrum of sizes and offerings. With its main tablet brand, the Galaxy Tab, Samsung offers five screen sizes, from 7 inches to 10.1 inches. (All tablet screens are measured diagonally.) There's also an 8-inch and 10.1-inch Galaxy Note, under Samsung's large-size smartphone brand.

Amazon is pressuring Apple on price. Its new Kindle Fire tablets, with faster processors and improved screens, sell for $229 for a 7-inch model and $379 for an 8.9-inch version. By comparison, the iPad Mini starts at $329, with the larger, high-resolution model at $499.

The same day Apple holds its iPad event, Microsoft will introduce its second-generation Surface tablet. With Microsoft Office and Outlook email included in the new Surface, the software giant is hoping to appeal to corporate customers—a largely untapped customer base for tablets.


Google Inc. GOOG -0.02% and Sony Corp. 6758.TO -0.88% are pushing ahead with new tablets of their own, while Asustek Computer Inc. 2357.TW +1.40% and Lenovo Group Ltd. 0992.HK +1.36% are gaining market share in parts of Asia where prices matter more. Several little-known Chinese brands also produce inexpensive tablets that run Google's Android operating system.

The iPad Mini has helped Apple stave off rivals so far. Shortly after the iPad's successful launch, competitors including Samsung, Google, and BlackBerry began sketching smaller, lighter, cheaper alternatives.

In late 2010, a half-year after the iPad's debut, Apple's late co-founder Steve Jobs dismissed the idea of creating a seven-inch tablet; Mr. Jobs thought a screen of that size would be a "tweener"—too big for a smartphone and too small for a tablet.

Apple Chief Executive Tim Cook has said subsequently that the Mini—slightly bigger at 7.9 inches—isn't a compromised product and is in a different league than other seven-inch tablets.

Apple has said that it priced the Mini aggressively, with smaller profit margins than the company average, because of the long-term potential in the tablet market.

Gene Munster, an analyst at Piper Jaffray, thinks the margins on the two types of iPads are similar. Mr. Munster estimates that the iPad Mini accounted for 61% of Apple's tablet sales in the three months ended June and expects that to grow to 65% next year.

Tablets based on Google's Android operating system are gaining market share, but the iPad's larger universe of apps remain a big advantage.

Apple lists more than 375,000 apps designated to work on the iPad, compared with the "low tens of thousands" tablet apps in Google Play, according to research firm Canalys in August.

Canalys said nearly half of the 50 most popular paid and free iPad apps weren't available in Google Play or weren't optimized for tablet use.

—Min-Jeong Lee and Lorraine Luk contributed to this article.

Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Ian Sherr at ian.sherr@wsj.com