New iPad could boost content provider stocks
Will Apple's tablet help save video games?
Pyykkonen also believes major content providers such as Time Warner (TWX), Disney (DIS) and CBS Corp. (CBS) will also benefit from the new iPad. When you have high-def content "so much closer, all of those content owners are going to win." Walt Disney chief Bob Iger embraced the original iPad from day one. He attended the unveiling event and announced content deals shortly after, as he saw the iPad as a way to create new forms of content.
According to market researcher NPD Group, U.S. retail sales of video games dropped 20% in February to $1.06 billion, compared to $1.33 billion a year earlier. However, NPD analyst Anita Frazier estimates that people spent an additional $550 million to $600 million on acquiring video content outside of brick-and-mortar retail stores. This includes spending on mobile games and video-game downloads. The trend of mobile gaming is likely to continue as more people find enjoyment playing cheaper and better-looking tablet games. Companies like Electronic Arts (EA), Activision Blizzard (ATVI) and Zynga (ZNGA) stand to benefit as the new iPad's screen and quad-core graphics chip mesmerizes gamers.
Shortly after the new iPad was unveiled, EA announced, "We're already working on versions of Mass Effect Infiltrator and Real Racing 2 among other games that will take full advantage of the new iPad's capabilities -- expect even more stunning graphics and intense action."
The tablet market is booming, with many predicting that one-third of the U.S. adult population will own a tablet by 2016. Despite advancements in tablets made by Samsung, Sony (SNE) and Toshiba, Apple still controls around 70% of the tablet market. Tablets using Google's (GOOG) Android software tend to be more affordable than iPads, but have been inconsistently branded. Meanwhile, Amazon's (AMZN) Kindle Fire and Barnes & Noble's (BKS) Nook tablet are far behind Apple in terms of market share.
(Microsoft owns and publishes Top Stocks, an MSN Money site.)
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Eric McWhinnie is an editor at Wall St. Cheat Sheet. As of this writing, he did not own a position in any of the aforementioned stocks.
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The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
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