Thursday, July 05, 2012

Apple Preps for New Tablet

Apple Inc.'s AAPL +1.15% component suppliers in Asia are preparing for mass production in September of a tablet computer with a smaller screen than the iPad, people familiar with the situation said, suggesting a launch for the device is near.

Two of the people said that the tablet's screen will likely be smaller than eight inches. The iPad's screen measures 9.7 inches, unchanged since the first model was released in 2010.

Officials at the component suppliers, who declined to be named, said this week that Apple has told them to prepare for mass production of the smaller tablet. The Wall Street Journal reported in February that Apple was testing such a device but hadn't yet decided whether to proceed with production.

One person said the screen makers Apple is working with include LG Display Co. LPL +4.44% of South Korea and Taiwan-based AU Optronics Co. AUO +1.24%

An Apple spokeswoman in California declined to comment.

Analysts said a smaller tablet could help Cupertino, Calif.-based Apple maintain its dominance in a market that keeps getting more crowded. Competitors include Samsung Electronics Co. 005930.SE +1.36% and Inc., AMZN +0.09% while Microsoft Corp. MSFT +0.65% and Google Inc. GOOG +1.27% recently unveiled tablet devices.

Last year, the iPad held a 62% share of the world-wide tablet market, according to market research firm IHS iSuppli, which expects overall tablet sales this year to surge 85% to 126.6 million units..

As the market continues to expand, consumers' choices—in size, technical specifications and price—are growing more varied. Last week, Google started taking orders for the Nexus 7, a tablet device with a seven-inch screen that will sell for $199. That matches the price of Amazon's Kindle Fire, which came out last year and also has a seven-inch screen.

Microsoft's Surface tablet, expected to debut this fall, has a 10.6-inch display, larger than the iPad. Microsoft's Windows Chief Steve Sinofsky said that it will be "priced like comparable tablets."

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