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Goldman Sachs sees iPad demand slowing

Mike Schramm
November 16, 2011
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Almost two years after the iPad launch, Goldman Sachs reports that demand is slowing down, just as the holiday shopping season begins. "While improving holiday demand into late November could certainly push the momentum in the other direction, we believe it is prudent to assume the iPad is facing some near-term demand challenges," writes Bill Shope.

Shope believes price is the reason. Amazon's Kindle Fire tablet is much less expensive at US$199, for example. While many consumers are still willing to pay more for a quality product, there's no question price is a big driver in a market like this. Shope recommends that if Apple wants to keep demand for the iPad as high as it's been in the past, the company will need to get the price down. The iPhone's price dropped off sharply after introduction, but we haven't seen that same drop with the iPad.

Shope also says that increasing adoption of iCloud and Siri integration would likely drive iPad demand back up. Shope does call the iPad's growth chart "remarkable by any metric," but his analysis says Apple must act soon to kick the iPad back out into the spotlight as competing tablets threaten to take it away.

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