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Will Nook and Fire Scrooge iPad's Holidays?

By Rachelle Dragani MacNewsWorld ECT News Network
Nov 9, 2011 5:00 AM PT

Looking ahead to a holiday season in which it hopes to ride high with its iPhone 4S, Mac and industry-dominating iPad, Apple made a few power plays this week.

Will Nook and Fire Scrooge iPad's Holidays?

First, it awarded a bonus of 150,000 stock shares to most of its senior vice presidents, which currently totals about $60 million in bonuses. However, the bonus will only be fully awarded if the employee remains at Apple until March of 2016.

The bonuses will give employees incentive to stick around and develop significant advances so their shares gain value going forward.

As of September 2011, Apple's iPad sales accounted for about 75 percent of the tablet market, though that market will become more crowded soon with the arrival of the Amazon Kindle Fire and the Barnes & Noble Nook Tablet, two devices that, at $200 and $250, respectively, significantly undercut the iPad's price.

The newly launched iPhone 4S, however, is continuing on its record sales path, and even though Samsung announced it shipped more smartphones last quarter, Apple's sell-through numbers are strong, especially now that the 4S version is on the market.

Exposing Security Flaws

While the company was rewarding its prized employees, it was giving the boot to one of its third-party developers.

Charlie Miller, a cybersecurity researcher with Accuvant Labs, recently disclosed a flaw in iOS that made it possible to build apps that can secretly download programs capable of controlling a victim's device and subsequently read or destroy information.

In a YouTube video, Miller demonstrated his findings with a stock-monitoring tool called InstaStock to take over a device, proving it could work on an iPhone or iPad. The test didn't involve actually taking over a stranger's phone or introducing any malware, but the fact that it was possible to sneak the program into the App Store could call into question the portal's security model.

Apple, according to Reuters, responded by denying Miller the right to develop iOS software and would discontinue his programs previously available in the App Store.

His response, via a tweet, was "Me angry."

Apple didn't respond to MacNewsWorlds' requests for any further comment.

Tablet Dominance

For the past year and a half, Apple has held the tablet category in a vice-like grip, allowing Android-based competitors only the slimmest of margins. However, with new -- and cheap -- Android tablets on the horizon for the holiday season, it's unclear whether Apple can maintain such a strong lead.

One advantage iPad does have: consumers' tendency to go with what they know.

"It is so early in the tablet category that it is not nearly established. When that happens, consumers who are interested in tablets seem to go with the safe bet, the market leader, and the one that seems to have the most positive global feedback. That product happens to be the iPad," Ben Bajarin, director of Creative Strategies told MacNewsWorld.

Besides the more affordable, mass-marketed tablet products like the upcoming Fire and Nook Tablet, Windows 8 is due out next year, and Microsoft is targeting that OS for the tablet market as well as desktops and laptops. Also, Android will offer many additional tablets next year, but sometimes saturation isn't the key to gaining on competition.

"Next year will see a host of new tablets from Android released, but to be honest, that kind of device overload is actually worse for Android than better. I say that because when you have a complicated plethora of choice with Android, it makes it even harder to pick the right one. Those kinds of scenarios again encourage consumers to go with the safe bet," said Bajarin.

iPad users don't seem to be holding out for the iPad 3, which Apple hasn't even begun discussing publicly. DigiTimes reported this week that when it does come out, it might alter its LED backlight solutions and opt for the higher-quality LCD panels. The updates are probably not going to be a driving factor in sales, though.

"This is a huge 'who cares?' issue for consumers. I expect that most of the Apple fan club who may think that they care still won't understand the issue completely anyway. It's pretty esoteric," Alfred Poor, an analyst at GigaOm Pro, told MacNewsWorld.

Rachelle Dragani is a freelance reporter based in Brooklyn, NY. She enjoys staying on top of e-commerce deals, reporting on what new gadget is coming your way, and keeping tabs on anyone trying to hack into your info. Feel free to e-mail her at

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