Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
But iPad users do far more shopping than Android tablet users, retailers report.
Apple Inc. has unveiled two new iPads: the iPad Air (the fifth incarnation of its flagship 9.7-inch screen tablet) and the iPad Mini with Retina Display (the second incarnation of its newer 7.9-inch screen tablet). Both tablets are faster, smaller and lighter than their immediate predecessors, Apple says. And both feature Apple's Retina Display, super-high-definition screen resolution through which, Apple claims, the human eye cannot distinguish pixels.
When it comes to impacting mobile commerce, the new iPads contain no bombshells or game-changers, such as the Touch ID biometrics fingerprint reader on the recently launched iPhone 5s, which is absent from the iPads. However, the addition of Retina Display to the iPad Mini reinforces the need by retailers to serve high-quality imagery to shoppers on Apple's tablets, mobile experts say.
What retailers should watch is tablet market share and how that might affect the mix of devices accessing their sites and apps, experts say. Why? Because Apple priced the iPad Air starting at $499 and the iPad Mini 2 starting at $399, the high end for tablets of their respective sizes, says Jan Dawson, chief telecommunications analyst at Ovum, a technology research and consulting firm.
"These are premium price points, Apple isn't going down-market at all," Dawson says. "In fact, the two older devices that are still in market have pretty dated specs at this point and aren't even all that price-competitive. So these new iPads are premium devices for those willing to pay a little more for the privilege."
The two older devices Dawson refers to are the iPad 2, starting at $399, and the original iPad Mini, starting at $299.
By not competing on price, Apple essentially is ceding market share to manufacturers of tablets running Google Inc.'s Android mobile operating system, mobile device analysts say.
“This is the clearest statement Apple could have made that it is only interested in competing in the premium tablet space," Dawson says. "The yawning gap between the specs of the cheaper iPad Mini and iPad 2 and the new iPads signifies that it is only willing to compete at the lower price points with older models. This leaves a huge chunk of the tablet market unserved by Apple, while others such as Google, Amazon and a raft of others aggressively target the under-$400 market. Apple's share in tablets will continue to fall as Android's share rises over the coming years."
In 2012 the iPad accounted for 57% of tablets sold, investment firm Barclays Capital says. The firm estimates the iPad's share will fall to 54% this year, 49% in 2014, and hold at 47% in 2015 and 2016.
"The new iPads are really about making sure Apple maintains the premium brand experience for the holiday season when competition is heating up," says Thomas Husson, vice president and principal analyst at Forrester Research Inc.
On that note, Amazon.com Inc. in September debuted new Kindle Fire HD and Kindle Fire HDX tablets. Both tablets run on the retailer’s latest, Android-based operating system, “Mojito,” and, like the new iPads, promise faster performance and better displays than their earlier cousins. But unlike the new iPads, the 7-inch screen Fire HD costs $139 and the 8.9-inch screen Fire HDX costs $379.
But even if the iPad loses tablet market share, its users are still the most valuable mobile shoppers. Retailers consistently report to Internet Retailer that the overwhelming majority of their mobile traffic comes from Apple devices, often as high as 90%, and that iPad users boast the highest mobile conversion rates and the highest mobile average tickets, often higher than desktop average tickets. Android tablets have yet to make much of an impact on mobile commerce.
There are some new aspects of the new iPads that retailers should consider, says Rakuten.com Shopping chief operating officer and chief marketing officer Bernard Luthi.
"Now that high-DPI, a.k.a. Retina Display, screens are becoming more prevalent, it’s important for retailers to embrace higher-quality, higher-DPI images," Luthi says. "Similar to how HD changed the television landscape and consequently how production companies handle makeup, we now must care more about our overall product image quality. One way to make the transition to high-DPI images easier is to utilize the 'srcset' tag in HTML 5, which is supported by all major tablets and phones. This allows the client to load the appropriate DPI image automatically, without complicated code or image-swap schemes."
Also, the new iPads are now unified when it comes to specifications; for example, the screen resolutions, processor speeds and architecture are now universal across the new iPad line, Luthi explains.
"That will allow retailers to simplify the profiling of their site performance, since the site will behave identically across the new iPad line-up," he says. "Similarly, because the resolutions are the same between the iPad Air and iPad Mini, retailers have the flexibility to target a single resolution in their tablet development, should they choose to do so."
Further, with the iPad's new 64-bit processor, retailers should consider showcasing more modern designs, menu transitions and product carousels that take advantage of HTML 5/CSS 3, Luthi says. HTML5 is an advanced web programming language that can make sites more like apps. CSS3 stands for Cascading Style Sheets 3, a style sheet language that dictates the look and formatting of HTML files.
"The new processors put iPad performance at near desktop capability, and the extra horsepower ensures that HTML animations should run smoothly and look at least as beautiful as their desktop counterparts," Luthi says.
Apple says it has sold 170 million iPads to date. Mobile analytics vendor Localytics reports 8% of iPads in use are first generation, 38% second generation, 19% third generation, 18% fourth generation, and 17% iPad Mini.
Apple also reports that 475,000 of the 1 million apps in its App Store are designed for the iPad, and that iPhone and iPad apps have been downloaded 60 billion times.