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Why Apple iPad Concerns Are Overblown

Stocks in this article: AAPL GOOG

NEW YORK ( TheStreet) -- Stop me if you've heard this one. Apple (AAPL - Get Report) is losing market share to Google's (GOOG) Android in mobile. Well, it's happening again with tablets, but there's a very good reason for that. No new Apple iPads for a year. Until now.

Research firm IDC notes that Apple continued to lose market share during the third quarter, taking 29.6% of the market, down from 40.2% in the year-ago quarter. Earlier this month, Apple unveiled the iPad Air to rave reviews and the new iPad mini with Retina Display, which should boost Apple's tablet market share during the holiday shopping season.

Apple sold 14.1 million iPads during the third-quarter, down from 14.6 million iPads in the prior quarter. The total tablet market was 47.6 million units, according to IDC, up 36.7% year over year, and 7% sequentially. That growth has been fueled by Android devices, such as those from Samsung. The Korean tech giant shipped 9.7 million devices during the third quarter, owning 20.4% of the market, up from 12.4% a year ago.

Rounding out the top five in the tablet market were ASUS, which makes the Nexus 7 for Google and shipped 3.5 tablet devices during the quarter. Lenovo was in fourth place, shipping 2.3 million units to take 4.8% of the market, and Acer, which shipped 1.2 million units, good for a 2.5% share.

Amazon (AMZN), Microsoft (MSFT) and recently private Dell were grouped into the "Other" category by IDC.

With the new iPad Air and iPad mini with Retina Display, Apple has not only brought new products to the market, but it's keeping the iPad 2 and first-gen iPad mini on the market as well.

"With two 7.9-inch models starting at $299 and $399, and two 9.7-inch models starting at $399 and $499, Apple is taking steps to appeal to multiple segments," said Jitesh Ubrani, Research Analyst with IDC's Tablet Tracker. "While some undoubtedly hoped for more aggressive pricing from Apple, the current prices clearly reflect Apple's ongoing strategy to maintain its premium status. It's worth noting that Apple wasn't the only one to increase the price of its small-sized tablet during this product cycle: Both Google and Amazon increased the price of their newest 7-inch tablets from $199 to $229 to cover the higher costs associated with high resolution screens and better processors."

Apple is confident that the combination of new iPad options and lower price points will appeal to consumers. Apple CEO Tim Cook thinks it'll be an iPad-centric holiday shopping season. "I think it's going to be an iPad Christmas and -- but we will see, we will report the numbers back to you in January how we did," Cook said on Apple's earnings call. "But we are pretty confident."

-- Written by Chris Ciaccia in New York

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