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3 Reasons to Still Believe in the iPad

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.
  • (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.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Google, Apple, and Motley Fool newsletter services have recommended buying shares of Google,, and Apple, writing puts on Barnes & Noble, and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (1)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 28, 2012, at 10:41 PM, Thompr97 wrote:

    Everybody and their dog knows that it's the iPhone figures that were light, not the iPad. Nobody is questioning the 17 million iPads... at least not until you right now.


  • Report this Comment On July 28, 2012, at 11:24 PM, applefan1 wrote:

    Well, the summer months are typically slower than the end of the year and the beginning of the year. It's been that way for a long time. Apple STILL did 20% increase in net profits in one of the slowest quarters of the year. They didn't release the laptops until the end of the quarter and they are still catching up with demand for the high end Retina models, since the iMacs, MacMinis and MacPros weren't announced, that those potential sales are on hold.

    Apple is OBVIOUSLY releasing products spreading out the release dates either intentionally or unintentionally because of availability of key components, which is typical. Plus, it's not good to release everything all at once because it causes too much confusion for the consumer, sales force, support people, etc.

    Apple's doing just fine. They are still going after a big market with China.

    What the most important thing is year to year sales growth.

  • Report this Comment On July 29, 2012, at 12:48 AM, Secs27 wrote:

    It's hard to phantom your mentality. How can you possibly compare the 7" google or that hunk of junk kindle fire to the iPad. Have you used an iPad? Have you used the others. There is no comparison. Unlike android which is clunky and unstable, apples iOS is smooth, trouble free . Using the iPad is a truly enjoyable experience. The only thing that POS kindle fire is good for is testing the laws of gravity and dropping it off the empire state building.

    The retina display on the new iPad is so clear that it defies comparison to anything else. The iPad is faster and very smooth with no issues whatsoever . The fire is plagued by crashes that say force close. The iPad has front & rear cameras. The iPad is very powerful and is used in a myriad of industries such as the medical and education fields. Try using a kindle fire for anything intelligent and productive. It's only good for buying overpriced crap on amazon. The bottom line is that you are ridiculous for comparing an iPad to the the other subpar devices. Spend some time with the new iPad and then tell me that you could trade it in for a kindle fire.

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