For the first time in a while, Apple (Nasdaq: AAPL ) came short of Wall Street's hopes when reporting earnings this week. By some estimates, weaker-than-expected iPad sales were to blame, but other figures show analysts were looking for just 15.7 million tabs sold. The Mac maker moved 17.04 million iPads during its fiscal third quarter.
CEO Tim Cook, for his part, said Apple was "thrilled" with how many iPads it sold. Investors don't share his enthusiasm; the stock is down more than 4% since Tuesday night's report. Is that fair? I'm not so sure. Fresh evidence says that iPad competitors aren't executing as well as they could be:
- According to ZDNet, Google's (Nasdaq: GOOG ) U.K. launch of the Nexus 7 tablet has been marred by failed deliveries and inventory hiccups. To be fair, we don't know how pervasive the problem is or the scope of Google's involvement. The reports are nevertheless troubling given the stakes.
- Amazon.com (Nasdaq: AMZN ) has instituted a 50-megabyte-per-month limit on 3G browsing for owners of its Kindle Readers. Members of the MobileRead forum who've run into the wall say the e-tailer issues a warning that says they have "24 more hours" before needing to find a Wi-Fi connection. Is this really so bad? No, but its also another way for the iPad to distinguish itself from the low-priced Kindle.
- And finally, Barnes & Noble (NYSE: BKS ) has brought its reader app to the Web to accommodate users who would rather use an iPad or Android tab for reading. There's just one problem: According to TechCrunch, the site won't load in the mobile Safari browser the iPad uses. B&N is relying on the grace of Apple to sell more e-books to iPad owners.
None of these developments is particularly detrimental. But as an investor, consider where Apple stands currently. According to Strategy Analytics, the iPad accounted for 68.3% of tablets shipped last quarter. And that's in spite of the success of the Kindle Fire.
My point? Competition isn't doing much to dampen enthusiasm for Apple's offerings under the best of circumstances. Amazon, Google, and their Android allies can't afford mistakes and limits if their aim is to steal a larger slice of the tablet market.
Now it's your turn to weigh in. Whether you agree or disagree, Apple is a key player in the trillion-dollar market opportunity forming around mobile technology. You can track keep track of all the Mac maker's moves and their impact on investors with this brand-new premium report outlining the risks and opportunities facing the business. It comes with a full year of free updates. Get your copy now.