Apple Gets Free Advertising Other Companies Could Only Dream Of
Nov 12th 2013 3:00PM
Updated Nov 12th 2013 3:04PM
Apple's management no doubt enjoyed last week's Jimmy Kimmel Live: The company got the sort of advertising its rivals would kill for, and it didn't cost Apple a dime.
In a hilarious mix-up, the show's host, Jimmy Kimmel, presented a guest with Sony's Xperia Z tablet. The guest, being a 5-year old boy, failed to obey proper social procedure, handing Sony's tablet back to Kimmel and explaining that his family was "planning to get an iPad for Christmas."
Still, while Apple may have won the hearts of 5-year old geniuses, its investors shouldn't get too complacent. Tablets powered by Google's Android are finally starting to challenge Apple's iPad.
What's wrong with the iPad?
The last two quarters haven't been great for Apple's iPad. In October, Apple reported that it sold 14.1 million iPads in the third quarter, up just 100,000 from the prior year. In the second quarter, Apple's iPad business actually contracted, down 14% on a year-over-year basis.
Obviously, the iPad isn't going away, but the trends shaping Apple's tablet business are unprecedented in its recent history. Less than four years out from its introduction, the iPad business appears to have peaked -- it took 7 years for the iPod to peak, and the iPhone business (when adjusted for quarterly swings) still looks like it's growing.
The new iPad Air and iPad Mini with retina display could reignite demand for Apple's tablets. Certainly, iPad sales will be a crucial number to watch for in Apple's next earnings report.
Sony is one Android OEM to watch
Sony, meanwhile, is one Apple competitor investors should keep an eye on. When it comes to tablets running Google's Android operating system, investors may be inclined to think Samsung -- indeed, Samsung is the largest manufacturer of Android tablets.
But in the last year, Sony has emerged as a viable threat. Sony's Xperia Z -- the tablet rejected on Jimmy Kimmel -- was arguably the iPad Air six months before Apple released it. When it first went on sale, the Xperia Z was the lightest and thinnest tablet on the market; Sony even compared its tablet to a pencil months before Apple did the same.
Sony plans to focus on its mobile division going forward. Last month, the company posted a disappointing loss, as demand for TVs, PCs and cameras came in weaker than expected. Sony's mobile division was a lone bright spot.
As Sony shifts its focus to mobile, the company's management has said it will stick with the high-end, offering expensive Android tablets and smartphones that will compete directly with Apple's offerings.
First smartphones, now tablets
Eventually, 2013 could go down as the year tablets powered by Google's Android finally overwhelmed Apple's iPad. Several firms, including Canalys and ABI Research, have reported that Google's hardware partners combined to surpass the iPad in 2013.
In large part, that's no thanks to Sony -- though its expensive Android devices could eventually challenge Apple, they don't appear to be selling well right now. IDC reported that Sony didn't even crack the top five tablet vendors in the third quarter. Perhaps that's why Kimmel's guest didn't want a Sony tablet.
Regardless, Apple's tablets appear to be losing ground to Android-powered rivals -- free advertising or not.
Would you take an iPad over Sony's tablet?
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The article Apple Gets Free Advertising Other Companies Could Only Dream Of originally appeared on Fool.com.Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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