Better, sharper rivals are lining up to take a bite out of Apple

Friday, 9 November 2012 - 12:09pm IST | Place: London | Agency: The Daily Telegraph

Investors react to Apple's falling market share in the new tablet market, the recent software problems, disappointing quarterly results and the management shake-up which saw the exit of COS boss Scott Forstall and retail chief John Browett.

There's been no respite for Apple shares which continue their alarming decline. Once the US market opened yesterday the shares continued their journey south. They're now off a fifth in just two months.

Investors are reacting to Apple's falling market share in the new tablet market but also a recent management shake-up after software problems and disappointing quarterly results, which saw the company's operating system boss Scott Forstall leave along with its retail chief, John Browett.

It's unusual for Apple to be going into a Christmas selling period with a share price in such rapid retreat. Normally the market is agog in anticipation of the eye-watering sales figures that the company's suite of iProducts would be expected to deliver.

Over the past seven to eight years, Apple's innovations have left the competition stranded. But what's becoming apparent is that not only have rivals learnt how to react, they are getting better and quicker at doing so too.

Last Christmas if you had walked into a store in Britain run by Dixons, for instance, Apple had the market largely to itself. This year the likes of Dixons are still expecting to sell twice as many iPads as last year. But the tablet market will be four times bigger. Consumers will not only be able to choose between an iPad and a iPad mini but also Amazon's Kindle Fire, Google's Nexus 7, the Samsung Galaxy Tab, the BlackBerry PlayBook, which remains in demand, and the HP Envy X2, which is a convertible laptop that allows the screen to be detached from its keyboard and used as a tablet.

Prices are, inevitably, starting to come under pressure. The price deflation so destructive in the PC market is a way away from invading tablets but the direction of travel is clear.

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