Competition? Apple outshines rivals

Apple's stock may be sliding as investors fret about growing competition, but store visits and interviews with smartphone and tablet shoppers in 10 cities around the world suggest consumers share little of that negativity.

With tablets and other mobile devices the gadgets of choice this holiday season, Reuters canvassed over 70 shoppers and store employees across Sydney, Seattle, Palo Alto, Shanghai, Bangalore, Singapore, Paris, London, Mexico City and Boston for insight into what does and doesn't beckon.

Apple stores and electronics retailers were bustling last week, in contrast to the Microsoft pop-up stores in the United States promoting Windows 8 and Surface tablets, which were far less crowded.

Samsung appeared to be marketing aggressively, blanketing stores across major cities with signs for its Galaxy products and other devices, and large displays in many stores. Customers noticed, but only in Singapore and Bangalore did most of those spoken to by Reuters see it as a top choice.

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Nokia, meanwhile, seems to have all but vanished from the front lines of the retail wars. Amazon's Kindle devices were also little in evidence, though that likely reflects its greater online sales focus.

Apple and its rivals are duking it out in displays, buying advertising and mobilizing armies of employees to try to win over the swarm of shoppers who will hit malls across the globe in coming weeks.

Loyalty to Apple's compelling orchard of products seemed to be a first line of defense for the Cupertino, California, company as shoppers in Europe, Asia and the United States weighed the pros and cons of switching to rival offerings.

Customers cited existing iTunes music and video libraries plus the traditional Apple virtues of simplicity and ease of use as reasons to stick with the iPhone and the iPad.

"I just taught my Persian grandmother how to use her new iPhone. She's 77 and speaks no English," said Soheil Arzang, a 27-year-old law student in Palo Alto, California. "With a Windows PC there are so many buttons, it's confusing. I converted my parents officially to Apple iPhones, Macs and iPads."

His father "used to go to Best Buy, but now he just says 'let's go to the Apple store,'" Arzang said at a store near company headquarters.

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In Paris, Max Cevenne, a 62-year-old photographer whose iPad was recently stolen, grilled a sales clerk about how Samsung's 10-inch Galaxy tablet would work with his PC at home.

"The Samsung appeals to me because it has an SD (digital memory) card and is more flexible in terms of software and hardware you can use with it," he said at the FNAC electronics store near St Lazare train station. "But I may end up going back to the iPad since I already use other Apple products, and it might be simpler."

Across the English Channel at a John Lewis department store in London, Joanna Sargent cast her eye over Amazon's Kindle Fire, but since she's bought three iPad Minis for her sons, she said she would probably stay with what's familiar.

"I looked at going for another tablet, but although they are cheaper, you have to re-buy everything," she said. "We'd have to buy all the music again, and you have to take that into account."

Train engineer John Owen from Didcot, Oxfordshire, echoed: "Apple's got me in now."

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What's Hot, and What's Not

Just three years after their inception, tablet computers are the indispensable item. In a U.S. Ipsos poll conducted for Thomson Reuters from Dec. 8 to Dec. 11, one in three of 1,330 people surveyed were thinking of buying one of the slim gadgets.

Of those predisposed, 42 percent were leaning toward an iPad or iPad Mini, 16 percent were considering the Kindle Fire, and 14 percent a Samsung Galaxy. A mere 4 percent of respondents were drawn to Microsoft's Surface.

Apple has led the mobile industry since it launched its first iPhone in 2007 and then the iPad in 2010. But rivals including Samsung, Google, Amazon and Microsoft are making gradual inroads.

Ipads accounted for 54 percent of the tablet market this year but are expected to dip to 50 percent by 2016 as competing tablets gain ground, according to market research firm IDC.

Apple has lost a quarter of its value since September as fears grow about its ability to fend off challengers.

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Samsung in particular appears to have launched a global marketing blitz at stores and malls around the world.

In Mexico City, its logo was plastered on signs on roads and outside retailers such as Sanborns and Iusacell. Despite that high visibility, an employee at one shop said he's selling about 15 iPads a week.

"The iPad mini is selling out as soon as we receive the shipments. Last week we got 42 and this week 32, and they sold almost immediately. ... A lot of people buy them as gifts," he said.

There are 88.5 million mobile phone users in Mexico, out of which just 15 million have smartphones, according to industry data, an example of the sizeable potential market that Apple, Samsung and others are fighting for.

In India, where mobile phone sales grew at a 47 percent clip in the third quarter, according to Gartner research, iPhones are still the gold standard, and many models were sold out.

But Androids are steadily attracting consumers.

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In tech-savvy Bangalore, the affordable smartphones are pervasive, replacing many of the Nokia feature phones popular in the past.

IPhones and iPads are too expensive for many Indians, but that didn't discourage a steady stream of keen window shoppers at an electronics market plastered with Samsung advertising.

"You have to pay the Apple premium, but when you consider the ease-of-use and the whole Apple ecosystem, it's well worth the money," said 29-year-old Karthik Venkataraman.

That same stickiness was also a deterrent for many. "I want to be able to sync to different devices," said Chenelle Brandford, a 17-year-old student from North London.

In Singapore, the Samsung kiosk at a StarHub store was crowded, with customers testing out the South Korean manufacturer's Note 2 phone-tablets.

"I didn't want to get stuck in the Apple ecosystem," said one customer who recently bought an Android phone made by LG.

At a major electronics retailer in downtown Shanghai, most tablet shoppers said their first choice would be an iPad, but Samsung also had its share of fans.

"I don't like the iPad because it is too inconvenient to use. You cannot drag files directly into it but only by using iTunes," said Wang Daliu, 26 and unemployed. "The iPad has a closed system, limiting its capability." 

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The Laggards

Since Amazon, Google and Microsoft sell most of their tablets online, their devices came up less often than Samsung's and Apple's in Reuters interviews with shoppers.

Those companies are building their own ecosystems, but none have neared Apple's success at creating a simple-to-use, closed market of apps, music and content.

Microsoft, worried about declining PC sales, launched its foray into hardware with the Surface tablet in October to compete with the iPad.

The world's largest software company has not revealed sales figures for the tablet, which has won mixed reviews and is only available in its own stores and online in certain countries. On Tuesday, Microsoft said it would sell the Surface through more retailers starting this month.

At a mall in Boston, one person wandered into a Microsoft store for every nine who visited a nearby Apple store on a weekday last week. In Palo Alto, 40-year-old Javier Sanchez returned his Surface.

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"With the iPad, it's one step, and with this (Surface), it's two or three steps to do the same thing," said Sanchez, who also uses a Mac and an iPhone. "You open (the iPad) and it's ready for you."

Things looked not much brighter on Microsoft's home turf, in the greater Seattle area. A sales assistant at a Best Buy said he had been quizzed about sales of the Windows 8 device.

"A whole bunch of Microsoft guys basically interviewed me, asking me how well things were selling," he said, without going into details.

Another assistant, asked if the same store had 32GB or 64GB Surface tablets in stock, said, laughing: "We got plenty of both!"

Apple is likely to reveal holiday sales only in January, alongside results. For now, the loyalists have spoken.

"We're far more familiar with Apple," said Linda Jenkins at the Carphone Warehouse in London. Her husband, Vaughan, chimed in: "But they haven't taken us over yet!"