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Apple's iPad Still King Of Tablets

Market-Share Leader Will Face Challenges from Google, Microsoft 8/14/2012 9:33 AM Eastern

Apple increased its dominance in the media tablet market with the iPad's worldwide share rising to nearly 70% in the second quarter, according to research firm IHS iSuppli -- although Apple will face new competition from Microsoft and Google in the back half of 2012.

In Q2, Apple shipped 17 million iPad 2 and new iPad tablets, up 44% from the previous quarter. That boosted its market share by 11.5 percentage points, to 69.6% up from 58.1% in the first quarter. Through July, Apple has shipped more than 85 million iPad tablets since the product's launch in April 2010.

Third-generation iPadTablets have quickly emerged as popular video-consumption devices for TV and movie content, with displays that are larger and sharper than smartphones. Apple's newest iPad, for example, features a 9.7-inch screen with a 2048-by-1536 "Retina" display that yields a pixel depth of 3.1 million -- four times that of previous iPads and 1 million more pixels than a typical HDTV.

Google this summer introduced the $199 Nexus 7 tablet, and Microsoft is planning to launch Windows-based Surface tablets with HD displays this fall.

However, both will face "formidable headwinds with no sign that the market leader is backing off of its aggressive strategy in the market," according to Rhoda Alexander, director of tablet and monitor research for IHS.

Apple "is pushing visual performance boundaries with the new iPad, while providing value customers with a lower-priced alternative, the iPad 2," Alexander said. "With the expected entrance of the 7-inch version of the iPad in September, Apple is sending a clear message that it plans to dominate this market over the long term."

According to IHS iSuppli's research, satisfied tablet owners are likely to go back to the same brand for their next purchase, indicating Apple has established a strong lead that could be derailed only by a major stumble on an upcoming product release.

Samsung Electronics, Apple's closest competitor in the segment, has shipped almost 13 million total Android-based tablets to date. Samsung had 9.2% share in Q2, shipping 2.25 million units in the period, down from 10.8% the prior quarter.

Amazon.com's Kindle Fire was in third place with 4.2% share after shipping 1 million units in Q2, followed by Asus with 2.8% and Barnes & Noble's Nook with 1.9%, according to IHS iSuppli.

Apple's competitors have had a tough time establishing a clear brand identity in the media tablet market, which has forced them to compete on price, according to the research firm.

Google's entry-level $199 price point "exacerbates the price pressure across the Android tablet universe, just as Amazon's entry did in the fourth quarter of 2012," IHS iSuppli noted. Microsoft has not announced pricing for the Surface but said it would be in line with comparable devices.

 

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April