Tablet Market Share War Sees Major Shakeup in Q3 2012
05 November 2012

Tablet Market Share War Sees Major Shakeup in Q3 2012

Worldwide tablet shipments reached 27.8 million units during the third quarter of 2013.

 Tablets Continue To Erode Laptop and Desktop Sales

Worldwide tablet shipments reached 27.8 million units during the third quarter of 2012, growing 49.5 percent year-over-year and 6.7 percent compared to second-quarter shipments, according to new data from research firm IDC.

Apple iPad Buyers Wait For New Product Releases

With the new iPad mini and a fourth-generation full-sized iPad both shipping, it is expected that Apple will have a very good 4th quarter. Many potential iPad buyers were waiting for the new iPad's to launch before making the move to iPad. The iPad mini's high $329 starting price leaves plenty of room for Android vendors to build upon the success they achieved in the third quarter of 2012.

Market Share Trends

IDC notes that the iPad still represented 50.4 percent of all tablets shipped in the third quarter of 2012, but fell from 59.7 percent a year ago and plummeted from 65.5 percent in the second quarter. Android accounted for 49.6 percent of tablet shipments during the third quarter of 2011, a year-over-year increase of 9.3 percentage points.

Apple's Market Share Dominance Declining

Although Apple's iPad continues to lead the global tablet market with third-quarter shipments of 14 million, up from 11.1 million a year ago, its market share dominance is in sharp decline thanks to accelerating manufacturer support for Google's Android. Total shipments of Android tablets surged to 13.8 million during the third quarter, up from 7.5 million in the year-ago period.

Apple's Competitors Catching Up

Samsung Electronics led all Android tablet vendors with quarterly shipments of 5.1 million, followed by Amazon at 2.5 million and Asus at 2.4 million.

Windows 8 Tablet Earthquake About To Hit

Fourth-quarter tablet shipments could experience another seismic event. Windows 8 and Windows RT tablets launched in late October 2012 and consumers now have a third tablet platform from which to choose. Microsoft has a strong brand with a fantastic interoperability story with existing Windows software investment (with non-Windows RT tablets). Non-Windows RT tablets are able to use existing Windows's desktop software.

Analysts believe that price-point is critical and with a price point starting at $500 Windows Tablets may have a difficult time winning market share with Android's bargain basement tablet prices. Google is definitely disrupting based on price point and that is not about to change anytime soon.

Android's Pricing Strategy

Analysts almost universally agree that the most likely factor for Android tablet's quick rise in market share is price. According to an Appcelerator's worldwide survey of 2,200 app developers, price is the "most important factor of success." That means cheaper than iPad.

Apple carefully manages its brand and profit margins and has decided not to go the price strategy route.Apple is in it for the long-haul betting on the fact that price is not a sustainable long-term strategy for capturing mindshare.

Android tablet makers have to compete substantially on price because Apple competed on performance with it's tight integration of software and hardware.