Apple Foregoes Tablet Race to Bottom: Garner

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Oct. 23 (Bloomberg) -- Martin Garner, Director of Mobile Internet at CCS Insight, discusses Apple’s Ipad strategy and the reasoning behind giving away their “Maverick” software. He speaks on Bloomberg Television's “The Pulse.” (Source: Bloomberg)

World that is increasingly seeing prices drop for similar devices.

That is right.

Apple created this.

Now, everybody has come in.

We have got apple, lots of android and some windows.

It is a bit of a squeeze.

I don't think apple is going to join any race to the bottom.

They're going to stay on the premium circle.

Those products underlined that.

It is a segment that they more or less owned.

They are really good at it.

The ipad air is quite an amazing device.

There were no surprises.

It is an incremental move rather than anything brand-new.

The smaller ipad mini has proved to be phenomenally successful.

They have recognized that.

They put the faster a seven chip in it.

Is that going to be where the real growth comes?

If i look at the way these two stories above, the bigger air versus the smaller one, how are those two going to perform?

At the moment, the majority of the growth is on the smaller devices.

They seem to fit people's lifestyles particularly when you're using it on the train or taking it with you.

They seem to fit a bit under.

A bigger device -- we think it is interesting using the a7 and the display.

They're getting closer to macbooks.

Possibly we will see some way of combining those two.

You have an air product which is part of the macbook lineup as well.

The language is hurting to evolve in a similar direction.

We have seen on the windows side, several people experimenting with a laptop with a detachable screen.

They were fairly dismissive of that.

Talking about that, what will the competition learned from what apple has just done?

That is an interesting question.

The competition are not necessarily playing in the same space.

They need to kind of plow their own forest.

Samsung is picking up share but perhaps without the margins that apple is getting.

We think the branding around apple and the ecosystem, all that really counts in apple's favor.

Samsung doesn't yet have that.

They are giving away software.

How does that change the user experience or the user relationship?

It is interesting.

I think they're going after microsoft who have windows and office as two of their big cash cows.

Apple is after them in giving away.

Google is doing the same.

That three-way battle is developing.

Some would say the critical line for success runs through the software.

You have to have software, the according system has to be effective.

It has to take advantage of the 64-bit.

This is where you get the user experience.

They are changing the relationship there again.

We are going to give you the stuff.

You don't have to pay for an upgrade.

If i am running ryan armenta mayan, any of the older upper earnings -- lion or mountain lion, any of the older operating systems, you can get the new one for free.

No one is pretending that writing software on that scale is free or cheap.

It is supremely expensive.

Apple chooses to take its margin on hardware.

Google chooses to tickets marriage and on advertising.

Microsoft takes its margin on software.

They're all doing it differently.

They are all gunning for each other's business model.

The next couple of years ago in to see a lot of play out.

Think you very much indeed for coming out.

Let's keep talking tech.

After the u.s., china has more stocks on the nasdaq than any country.

Israel is in third place and it is catching up fast.

Elliott gotkine joins us from tel aviv with more.

We have a sudden surge.

Why?

There are three main reasons.

You have the buoyancy of the market.

The markets are doing well as of late.

That is a good environment for

This text has been automatically generated. It may not be 100% accurate.

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