This week, Bernstein Research analyst, Toni Sacconaghi, shared his thoughts on the tablet and smartphone market, outlining their implications for Apple.
Apple’s fierce competition with Android has been seen in the tablet and smartphone sector alike. Recently, the Cupertino tech giant has experienced a drop in fully fledged iPad shipments. Nevertheless, according to Sacconaghi, Apple is doing a better job in pricing and distributing its tablets than it is performing with the iPhone.
“Ultimately, we see several differences between Apple’s approach to the smartphone and tablet markets. The iPhone left a price umbrella for other smartphone vendors to offer cheaper unsubsidized smartphones, even at the premium end. […]Other smartphone vendors using free Android software were able to price below Apple for unsubsidized phones and still earn gross margins above 30%, especially on high-end smartphones.”
But when the iPad is concerned, no such facilities are available, maybe due to the fact that the Apple tablet was cheaper than other interior featured models when it was launched for the first time. But now the competition is adding even cheaper price tags. However, the iPad enjoys a strong presence worldwide via Apple’s carrier partners, Apple stores worldwide and third party re-sellers.
Sacconaghi seems to feel that the iPad will eventually fare out better than the iPhone, especially since Apple has been known to follow the lowering pricing trend with the release of the iPad Mini. He believes the move will allow the tech giant to preserve its market share.