Android: The Next King of Tablets? - Analyst Blog
November 29 2012 - 10:16AM
Zacks
Market research intelligence firm ABI Research’s new report
claims that Android-based tablets are eating away at the iPad’s
market share at a rapid rate. Though Apple (AAPL)
continued to maintain its lead in the tablet market, its market
share slipped to 55% in the third quarter, the lowest ever since
the iPad was launched in 2010.
Apple’s failure to respond in a timely fashion to the challenge
presented by Google Inc.’s (GOOG) Nexus 7 and
Amazon.com Inc.’s (AMZN) Kindle Fire is the
primary reason for its decline, says ABI. Though the company has
ultimately introduced the lower-priced iPad Mini, it fell short of
delivering an innovative product at the correct price point and
increasing its availability during the critical holiday shopping
season.
The bigger worry for Apple is that the Mini has failed to reclaim
market share from Android-based tablets. Instead, there is a
serious threat of the company losing the market share of its other
products – namely the larger iPads. Meanwhile, Android’s market
share has risen to 44%.
Earlier this month, International Data
Corporation’s (IDC) Worldwide Quarterly Tablet Tracker
delivered an unpleasant surprise to Apple, revealing that Samsung
Electronics Co Ltd and Amazon had made significant inroads into its
share of the tablet market. Third quarter data revealed that the
tech major’s market share had slipped from 65.5% in Q2 to 50.4% in
Q3.
Other tablets cashed in on the opportunity with Samsung leading the
pack, thanks to continuous expansion in its line of tablets. The
Korean electronic giant’s tablet sales grew a whopping 115% over
the second quarter.
Amazon, Asus and Lenovo complete the group of top 5 tablet vendors
and all three experienced sales growth over the second
quarter. The new 7 inch and 8.9 inch Kindle Fire HD tablets
from Amazon helped the company grow its market share from 4.8% in
Q2 to 9.0% in Q3. The Google-powered Nexus fueled Asus’ growth
while Lenovo gained from strong China sales.
The primary reason for Apple’s slow growth seems to have been the
fact that consumers were awaiting the launch of the iPad mini. IDC
said in its report that a large section of consumers were eagerly
awaiting the launch of the smaller tablet. The research firm
predicted that Apple would have a good fourth quarter, riding on
the back of the iPad Mini and a new fourth generation full-sized
iPad.
While the Surface tablet from Microsoft
Corporation (MSFT) was expected to emerge as a third
option, it has done poorly until now. This may partly have to do
with a $500 price tag which is warding off potential customers.
According to an analyst at Piper Jaffray, Microsoft’s retail store
at a leading mall in Minneapolis had 47% less traffic than the
Apple store on Black Friday. After observing both stores for two
hours, the analyst noted that Apple had sold 11 iPads whereas not a
single Microsoft Surface tablet was sold during the period.
Customers seemed to be waiting for Microsoft to release Surface
tablets running the Windows OS on Intel
Corporation’s (INTC) processors. The Surface models in
stores now use Windows RT running on low powered ARM processors.
Meanwhile, the iPad continued to dominate sales for now, with the
iPad Mini being sold out at several stores.
It is Google and Amazon’s aggressive pricing that has hit Apple the
hardest with the Nexus 7 being introduced at the $199 and the
Kindle Fire HD being announced at the same price point. Google and
Amazon are expected to grow their market share significantly over
the next year. The verdict is still out on who will eat the larger
chunk of Apple’s lost market share. But clearly, Android has
started to beat Apple at its own game.
APPLE INC (AAPL): Free Stock Analysis Report
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MICROSOFT CORP (MSFT): Free Stock Analysis Report
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