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TheStreet Open House

Apple, Google Must Turn to Enterprise Sales to Boost Tablets

NEW YORK (TheStreet) -- What is the big problem uniting the bears in Apple (AAPL), Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL)? Probably the slowdown in tablet sales.

As Gary Krakow reported, tablet sales for all these companies have "hit a wall." Worse, the industry is being rapidly commoditized and consumers are choosing cheap, low-margin Android tablets over more expensive models, according to Strategy Analytics

Read More:Why Facebook's Blowout Earnings Are Even More Impressive Than You Thought

This is why Apple, Google and the rest of the tablet makers are going to have to shift their focus to getting more businesses to use tablets if these companies are going to boost sales.

These companies have seen that on the consumer end the slowdown in U.S. tablet sales has been happening much earlier than expected. Only 40% of homes have tablets, including Amazon's Kindle Fire, according to Asymco, and sales of personal computers, are also slowing. 

What does this mean for investors?

From a stock perspective, not much at the moment. Apple's shares, at $97, are up 21% after its latest earnings report. Google, at $603, is up about 8%. Microsoft stock is up 20% and sells close to $45.

But if you want those shares to go higher, tablet sales must also rise. Microsoft's, Google's and Apple's tablets are victims of their own success. They are mainly being bought for home use as devices for looking at media -- movies, TV, and books. They are rugged, with no moving parts or fans that can break. Since storage is based in the cloud they don't require more memory.

As a result, average selling prices are plunging, with grocery stores now selling them for under $200. The devices are being positioned as mobile TVs and you're not going to get sales growth selling TVs.

Read More:Sprint to Begin Offering Google Apps for Business

By contrast, Apple iPhone sales continue to soar and the company has placed huge new orders for the next-generation iPhone 6. What do phones have that tablets don't?

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