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Pro: Apple lacking good news going into holidays

Monday, 25 Nov 2013 | 12:06 PM ET
Will it be an Apple Christmas?
Monday, 25 Nov 2013 | 10:11 AM ET
Discussing whether Apple can expect heavy traffic for iPads this holiday season, with Colin Gillis, BGC Financial, and CNBC's Jon Fortt.

With the crucial holiday shopping season here, the Apple name is losing its luster in the face of a more diverse market of tablets and smartphones, a tech analyst told CNBC on Monday.

In an interview on "Squawk on the Street," Colin Gillis, a senior technology analyst with BGC Partners, said the Apple brand needs some good news now that competitors have narrowed the gap between their flagship devices. He said he's looking toward a long-awaited deal—perhaps in mid-December—with China Mobile to stimulate the company's outlook.

Under the potential deal, Apple would distribute its new line of iPhones on the Chinese Mobile network, the world's largest wireless carrier.

"There's very few catalysts left in the name," Gillis said of Apple. "I'm looking toward the China Mobile news. ... I think most of the good news is out in the name."

(Read more: Apple, China Mobile deal may be coming soon)

A customer tries out the new Apple Inc. iPad Air at the 5th Avenue Apple store in New York.
Craig Warga | Bloomberg | Getty Images
A customer tries out the new Apple Inc. iPad Air at the 5th Avenue Apple store in New York.

Gillis said his company forecasts more than 25 million iPads selling this year, which he called a "great number" but cautioned that it could let down investors if Apple doesn't exceed that threshold.

Apple tablets face the same issues as its iPhones—other technology companies have caught up, Gillis said. Now, tablets from Amazon, Google and Microsoft cut into Apple's market share.

"It's following the same path as the iPhone," Gillis said. "The only smartphone was the iPhone and the competition slowly caught it. It's the same thing in the tablet marketplace. The only tablet was an iPad and then Amazon is going to get a little traction."

Apple made headlines this weekend when it acquired PrimeSense, an Israeli chip-developer whose 3-D machine vision technology was used in Microsoft's Kinect devices. Israel media said the deal cost about $350 million, which Gillis called a "drop in the bucket."

(Read more: Apple acquires 3-D chip developer PrimeSense)

Gillis said Apple was "behind the curve" when it came to motion sensing, which he predicted was becoming a bigger part of the home living room. He said Apple should be more "inquisitive" going forward and put more cash into work toward innovation rather than dividends, for example.

"They're lacking in payments," Gillis said. "They're lacking in advertising. There are a lot of areas where they're weak [that] they could grow in. They can go up and down the stack a little more."

Last month, Apple posted better-than-expected earnings during its fourth-quarter, but disappointed investors on its forecast of future earnings. During the earnings call, Apple CEO Tim Cook predicted an "iPad Christmas."

Despite his bearish stance on Apple's outlook, Gillis said his in-house research showed Apple products still remained high on many people's Christmas lists.

"That being said, I'm going to buy one," Gillis said. "My kid only wants an iPad this Christmas."

(Read more: Samsung creams Apple in third quarter smartphone sales)

— By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this article. CNBC's Cadie Thompson contributed to this report.

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.