Is Intel’s $99 Tablet Bad News for Apple?
A recent study from IDC suggested that as the mobile device market becomes more heavily saturated, low-cost devices geared toward emerging markets and the education sector will become increasingly important for tech companies to continue growing. A Tuesday report from the Tab Times says that Intel (NASDAQ:INTC) is planning to release a $99 tablet by the holiday shopping season, which could be bad news for Apple’s (NASDAQ:AAPL) industry-dominating iPad.
Intel reported earnings after the bell on Tuesday, and according to the Tab Times report, after the earnings call, Intel CEO Brian Krzanich said consumers would see $99 tablets from the company by the holidays.
Intel’s earnings were not so impressive, as was expected for a company that depends so heavily on the PC market. Intel formerly dominated the PC chip industry, but now that consumers are favoring tablets and smartphones over personal computers, Intel has been struggling to keep up with the technological shift. These cheap tablets could be the company’s way to adapt.
Meanwhile, Apple will likely debut two new iPads at a media event scheduled for Tuesday, but the devices probably won’t cost anywhere near $99. Analysts are expecting Apple to show off an iPad 5 and a second-generation iPad mini with Retina at the event, both of which are expected to show strong holiday sales.
While it’s unlikely that Intel’s cheap tablet will outsell the new iPads right away, according to IDC research, the cheaper devices will become more prominent in the coming years. Price is one reason that tablets are eating away at the market share of PCs, so it stands to reason that cheaper tablets will begin to be preferred by consumers.
Apple has been highly reluctant to make low-cost products. Many analysts were disappointed by the high price of the iPhone 5C, which was supposed to be Apple’s cheap iPhone. Apple CEO Tim Cook responded to that criticism by saying, “We’re not in the junk business.” If IDC’s predictions prove correct, Apple may end up kicking itself later for refusing to focus on anything but the premium market, while companies like Intel will be ready with the inexpensive products needed to meet demand.
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