NEW YORK, NY -- (Marketwire) -- 12/11/12 -- A number of companies offering the hottest electronic items this year, including Microsoft Corporation (NASDAQ: MSFT) and Apple Inc. (NASDAQ: AAPL), look poised to benefit from a holiday season that is in full swing. Tablets are predicted to be a top selling gift and smartphones also remain as popular as ever before. Companies will have to deal with shoppers that have grown to expect discounts, nonetheless, those offering cutting-edge technology may not be as affected. While there are a number of positives working in favor of Microsoft and Apple, consumer sentiment recently declined. This fall could cause a number of end-buyers to rein in their holiday spending this year.
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As tablets continue their rise in popularity, companies that are able to provide a device with the right mix of size, price and applications could outperform their peers. It is also important for companies to stand out in a field that is becoming increasingly cutthroat. Apple has done a good job in this regard, and continues to see strong sales of its iPad devices. The iPad mini has seen a positive consumer response, though supply issues may have had an impact on sales. That being said, the 'mini' could be one of the year's top electronic gifts. Microsoft has also been marking a solid stance in the tablet arena with its Surface tablet. The tablet has received positive reviews, and could boost Microsoft's sales significantly over the holidays.
The latest and greatest smartphones are also on people's Christmas wish-lists both at home and abroad. Microsoft is again doing a good job against some companies that have a longer history in the sector. The company has released a number of new products of late, and has apparently seen excellent sales of its Windows Phone 8 over the last little while. Smartphone penetration is on the rise in developing nations such as China and India, and with the number of middle-class also on the rise, the potential for international sales is immense. Apple has been making headlines abroad of late, as it newly announced that its iPhone® 5 is now available in South Korea. The iPhone will also be made available in more than 50 additional countries in December. The international expansion of availability for its latest phone certainly bodes well for the company moving forward, and could boost holiday sales. Countries of particular note include Russia, China and Brazil, all of which have a large number of smartphone users.
Although new products at home and abroad auger well, headwinds are still lingering. Due to the highly competitive nature of the electronics sector, companies have seen pressure on margins, as they compete to win the hearts of recession-hardened shoppers. Keeping input costs low while still delivering quality merchandise is seen as one of the keys to success. Falling consumer sentiment is also a concern, as it contracted considerably close to the start of December when compared to November. The upcoming fiscal cliff and the potential for higher taxes seem to be weighing heavily on some, and it will be interesting to see what effect, if any, it will have on holiday spending. Sales in Europe have also been a challenge for some, as the ongoing troubles there stubbornly persist. The region has made some headway though, and a turnaround may be in the cards in 2013.
While there are several hurdles for electronics companies to deal with at present, they look to be generally well situated to take advantage of the holidays this year. Foreign markets also look to have great potential moving forward, and those that can successfully expand their operations abroad also look well positioned to grow for the remainder of 2012 and throughout 2013.
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