Customer demand for Apple's next rumored tablet device is said to decrease due to the competition.
Several other tablet devices have sprung up lately and provide a challenge to the iPad 2. Kindle has its Kindle Fire, HP has its TouchPad, Motorola has its Xoom, and Samsung has its Galaxy Tab 10.1.
The company's stronghold may loosen and customers might direct their attention to other non-Apple tablets. This could present a problem for the iPad 3.
Goldman Sachs analyst Bill Shope spoke to BGR.com and said that Apple may lose its top spot in the tablet market.
"New Hon Hai forecast implies more limited upside to iPad units, which is disappointing for a December quarter. 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,” said Shope.
Shope listed the three main factors that could change Apple's course: the continued pushing of the iCloud, the launch of Siri on the next iPad, and a significant price cut.
"Price cuts have also been critical, and the iPad is overdue," Shope said. "While the rapid ramp of the iPad installed base is remarkable by any metric, it is even more remarkable when we consider the fact that it has occurred without any change in pricing or storage capacity."
"Indeed, the iPhone enjoyed several major retail price cuts in its first year. The 8GB version of the first iPhone saw its retail price slashed from $599 to $399 in its first three months on the market,” Shope added.
"Apple further improved affordability with the shift to a subsidized pricing model in 2008, bringing the price for an 8Gb iPhone down to $199 (with a two-year contract). Similar price cuts occurred with the iPod throughout its existence, and both the iPhone and the iPod saw storage capacity increases with each product refresh. In contrast, the launch of the iPad 2 saw no increase in storage capacity across the SKUs and no price change,” Shope continued.
The iPad 3 is rumored to be launching in March 2012 with a minor update and a thinner design.
Apple's next tablet is also rumored to feature an improved battery life span. It is still unknown on whether the iPad 3 will come with Siri, the voice-enabled feature.
A recently published patent application filed by Apple also indicated the iPad 3 will come with hands free controls. Apple filed for this technology patent in the second quarter of 2010.
Apple and Samsung are reportedly working on the iPad 3's A6 processing chip.