Apple Takes a Bruising in Tablet Market
"The market -- being more saturated with competition and having 12 more months to understand what tablets are, how they work and how they apply to a particular user or audience -- is going to make Apple's path a little more difficult," said ABI Research analyst Jeff Orr. "We've been asking owners casually about their plans to upgrade. They're not necessarily jumping up and down."
Android tablets outsold iPads in the calendar quarter ending in September, according to an IDC report released Thursday.
Apple's share of the worldwide tablet market also declined compared with the same period in 2012, the firm said. Although Apple sold slightly more units into its retail channel during this year's third quarter compared with last year's -- 14.1 million in 2013 versus 14 million in 2012 -- its market share slipped to 29.6 percent from 40.2 percent a year ago.
That decline can be attributed in part to sheer volume. While 34.8 million tablets were shipped in the September quarter last year, more than 36 percent more tablets -- 47.6 million -- were shipped during the period this year.
"In terms of competition, there has been increased shipments by the top five tablet makers," IDC Research Analyst Jitesh Ubrani told MacNewsworld.
With 20.4 percent of the market during the period, Samsung more than doubled its shipments, to 9.7 million from 4.3 million in 2012, IDC reported. Meanwhile, Asus (3.5 million from 2.3 million), Lenovo (2.3 million from 400,000) and Acer (1.2 million from 300,000) all bumped up their tablet shipments, too.
In addition to the top five tablet makers, another 16.8 million slates were pushed into retail channels by other players, including Microsoft and an assortment of white box makers.
"The numbers reflect that there is a lot of junk running Android flooding the market and driving growth," Rob Enderle, principal of the Enderle Group, told MacNewsWorld.
"But this kind of growth isn't sustainable, because an increasing percentage is low-quality junk that won't hold customers," he added.
Another part can be pegged to the iPad being at the end of a model's life cycle. "Toward the end of a product's life, we do see decline in shipments," Ubrani said. "That's been true for the last couple of years."
Apple's flat numbers during the quarter may not be a source of much chagrin for the company.
"Considering it was pretty clear that there was a new lineup coming, they did OK," Gartner Research Vice President Carolina Milanesi told MacNewsWorld.
While market share is often treated as a measure of who's winning a business war, it isn't the only measure.
"Market share, from Apple's point of view, is not as important a statistic as other things, like profitability, margins, and average selling price across its portfolio of products," independent mobile analyst Charles Golvin told MacNewsWorld.
"Loss of market share by Apple is no surprise -- but market share is not the criteria most important to Apple," he said.
"The IDC report doesn't reflect on profit," added Enderle. "If we did market share based on profit, Apple would still be dominant."
With the introduction of its new iPad lineup -- the US$299 iPad mini, $399 mini with Retina display and $499 iPad Air -- Apple should be able to recover in the December quarter some of the market share it lost in the previous quarter.
Tougher Row to Hoe
Last year, after refreshing its iPad line in the third quarter, Apple spurred growth from 14 million to 22 million units. This year it could be even better.
"If they were to follow that pattern, then they should be coming in around 24-to-26 million units in the fourth quarter this year," Jeff Orr, senior practice director for mobile devices at ABI Research, told MacNewsWorld.
"We definitely expect overall iPad shipments to be up quite a bit in the fourth quarter," IDC's Ubrani added.
However, both the market and consumers are maturing, which could impact those sales numbers.
"The market -- being more saturated with competition and having 12 more months to understand what tablets are, how they work and how they apply to a particular user or audience -- is going to make Apple's path a little more difficult," Orr said.
There's also the possibility that Apple's new offerings may not be compelling enough to entice users to upgrade.
"We've been asking owners casually about their plans to upgrade," Orr noted. "They're not necessarily jumping up and down saying it's the highest priority for them right now."
Even with increased holiday sales, it's uncertain whether Apple will reqain the dominance it had in the tablet market a scant 12 months ago.
"I'm not sure you'll see a surge back into the 40 percent range," Yankee Group Research Director Carl Howe told MacNewsWorld.
"There's an oddity in the tablet market," he explained. "When Apple does well, all the other tablet makers do well."