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A smaller-screen iPad could disrupt tablet market

Apple would rather see its iPads dominate the market instead of leaving open an avenue for Android to take away market share, one analyst said

By Agam Shah
July 5, 2012 06:53 PM ET

IDG News Service - An Apple iPad with a smaller screen, if released, could create tough decisions for buyers and slow the momentum of the current 9.7-in. iPad and a number of Android devices with 7-in. and 8-in. screens, analysts said on Thursday.

Speculation around Apple's plans to launch an iPad with a smaller screen than its current 9.7-inch display gained steam this week, with The Wall Street Journal reporting that Apple's component suppliers were preparing to produce such a device starting in September.

The story, which cites sources familiar with the situation, did not provide specific details about the tablet, but said the screens would be manufactured by LG Display and AU Optronics. A separate story by Bloomberg reported the product would launch in mid-October.

If such an iPad is released, it would enter a crowded market of small-screen tablets that include Google's recently released Nexus 7, which has a 7-inch screen and was announced last week, and Amazon's Kindle Fire, which was announced last year and has an 8-inch screen. The Fire and Nexus 7 run versions of Google's Android OS.

Analysts said some who already have an iPad may buy a smaller one, but new buyers won't purchase both and instead will decide what they want based on price, portability and usability. Consumers may buy the smaller iPad for use as an e-reader and to access media content if it is priced at roughly $200 to $300, analysts said.

Apple launched the iPad in 2010 and the company originally dismissed the idea of a 7-inch tablet because of the small screen size, but things may have changed after the release of the Fire, which was relatively successful, and the Nexus 7, said Frank Gillett, analyst at Forrester Research.

"Having something you can hold in one hand seems to matter to some people and may matter in emerging markets," Gillett said, adding that the lower pricing on competitive tablets may have also changed Apple's position.

Apple is not afraid of disrupting its own products and the company will chase an opportunity if it sees a different value proposition, Gillett said. Apple would rather see the iPads dominate the market instead of leaving open an avenue for Android to take away market share.

Analyst firm IDC has predicted Apple's grip on the tablet market will grow if an iPad with a smaller screen is released this year. In June, IDC said it expected 107.4 million tablets to ship this year, with the numbers growing to 142.8 million units next year.

A $199-to-$299 price range would be attractive to buyers, analysts said. A lower price may create an attractive entry point into Apple's iOS devices, but functionality will also matter in purchasing decisions.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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