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Apple to battle lower cost tablets with new iPad

apple123Apple Inc. is adding a new model to its iPad series to battle a growing list of competitors, which manage to present their own tablets at lower prices with similar features. Chief Executive Officer Tim Cook will debut a high-definition iPad mini and a thinner iPad at a San Francisco event tomorrow, people with knowledge of the plans have said.

As of right now Apple is the dominant company producing tablets with market share around 32% by unit shipments in the second quarter, according to market trackers IDC. However, that represents a massive jolt comparing it to the 60% company had a year earlier. The previous version of iPad mini now makes up around two-thirds of Apple’s iPad sales, analysts estimate, making it the world’s most popular tablet amid various alternatives.

“Tablets are a maturing market,” said Sarah Rotman Epps, an analyst at Forrester Research Inc. in San Francisco. “It will be difficult for Apple to move the needle on new tablet sales, as the strongest growth is coming from emerging markets where customers are more price sensitive.”

Samsung Electronics, Asustek Computer Inc., Lenovo Group Ltd., Acer Inc. and other competitors aim to conquer Apple market share, offering devices with prices starting at less than half of the iPad mini’s $329. Amazon.com Inc. introduced a new Kindle Fire lineup last month with higher-resolution screens at prices starting from $229.

While tablet shipments doubled to 166 million globally in 2012, Counterpoint Research projects that the growth rate will slow to 28% in 2014, to 301 million units. Apple is wisely upgrading its top-selling products ahead of the holiday shopping season. The Cupertino, California-based company introduced the iPhone 5s and 5c last month, selling more than 9 million in its opening weekend. However, the cheaper version iPhone 5C, is not recording high sales.

According to other analysts such as Giri Cherukuri, head trader for OakBrook Investments LLC, the tablet market is “nowhere near maturing” and there’s growing demand for new iPads. Even if Apple’s market share declines, the company is the “clear winner” because it makes more profit on each device.

As more consumers shift to tablets, PC shipments fell 8.6% in the third quarter to 80.3 million shipments, Gartner said, the lowest since 2008.

The current consensus among 55 polled by CNN Money investment analysts is to buy stock in Apple Inc. Despite it surged more than 3% last week, the tech giant shares still lag around 4% on a year-to-date basis.

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