Since last week’s correction in the share price of Apple Inc., investors have taken a far sunnier view of the stock. How else to explain that Apple’s invite to a news event on Oct. 23 has managed to derail Microsoft Corp.’s foray into the tablet space with a price tag on its coming Surface tablet?
That’s right, while both tech giants battled for attention on Tuesday, Apple emerged victorious. In afternoon trading, Apple’s share price was up 2.2 per cent while Microsoft lost an early lead and was last seen down 0.2 per cent.
Both share big news on Tuesday. In the case of Apple, the company sent out invitations to an event next Tuesday, with the line, “We've got a little more to show you.” To many observers, that signalled Apple is going to unveil a smaller iPad, dubbed the iPad mini, to compete with rival tablets such as Amazon.com Inc.’s Kindle Fire.
On the same day (coincidence?), Microsoft followed up on its announcement months ago that it would release its own tablet, called Surface, with pricing details. It also began accepting pre-orders before the tablet’s release in stores on Oct. 26, coinciding with the release of Windows 8 operating system.
Given the different directions of Apple and Microsoft shares, the market seems to believe that the tablet business is zero sum – and that Apple and Microsoft can’t both benefit from their respective launches.
But this may not be the right way to approach this particular battle. Apple has of course dominated the tablet universe with its launch of the first iPad, and it now appears to have the most to lose as competitors launch rival products, some of which significantly undercut Apple on price.
Indeed, a smaller iPad seems to be at odds with Apple’s previous strategy – and not only because Steve Jobs once derided the idea of a smaller tablet. That’s because it seems to be terribly defensive in nature. Creating a smaller tablet to take market share away from rivals is very different from launching cutting edge products – the iPod, the iPhone, the original iPad – that force competitors to scramble to catch up.