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Increased competition in the tablet market take a toll on Apple's share of the market

The latest tablet shipment figures from IDC are shedding a bit of light on what we’ve seen from Apple’s two most recent quarterly earnings reports. For its fiscal Q2 (calendar Q1), Apple’s iPad sales fell well below analysts’ expectations (16.35 million versus 19.7 million). The numbers for fiscal Q3 (calendar Q2) showed a further decline, with sales of 13.3 million iPads.
Whereas most of Apple’s competitors (with the exception of Acer, which saw a 36.3 percent decline in sales) showed year-over-year (YoY) growth, Apple witnessed a 9.3 percent decline. While Apple remains first in actual tablet market share, it slid from commanding 33 percent of the market in Q2 2013 to 26.9 percent in Q2 2014.
Back in Q1 2012, Apple was sitting pretty with 68 percent of the market.

Samsung remains in second place, having shipped 8.5 million tablets during Q2 to secure 17.2 percent of the market. Lenovo experienced a 64.7 percent surge in YoY growth to take third place with 2.4 million tablets and a 4.9 percent share of the market.

Samsung Galaxy Tab S 10.5
As we noted in the Apple earnings article, IDC reports that tablet sales in part are being affected by the growing appeal of “phablet” devices. “The market [is] being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles,” said IDC’s Jean Philippe Bouchard.
"We can also attribute the market deceleration to slow commercial adoption of tablets.”
Apple earlier this month enlisted the help of IBM to help bolsters its tablet fortunes in the enterprise market. Apple CEO Tim Cook admitted that it couldn’t take on such efforts on its own, noting that the “deep industry expertise you would need to really transform the enterprise isn’t in our DNA.”

Source: IDC

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By Acupuncture on 7/24/2014 1:34:35 PM , Rating: 1
Apple has a lot of room to grow in the enterprise sector. If their collaboration with IBM is successful, we could see a lot more sales to businesses.

RE: Enterprise
By CaedenV on 7/24/2014 2:09:04 PM , Rating: 1
Heck, if MS releases the iPad management stuff they were showing off last week at their conference then the iPad will see amazing growth in the enterprise sector. MS is going to do a better job selling iPads than Apple will.

RE: Enterprise
By Reclaimer77 on 7/24/2014 2:23:40 PM , Rating: 5
Apple and Enterprise go together like Communism and Capitalism.

Sure they have a lot of room to grow in the enterprise sector, when you're on the bottom there's nowhere else TO go...

RE: Enterprise
By Acupuncture on 7/24/14, Rating: 0
RE: Enterprise
By Reclaimer77 on 7/24/2014 3:10:24 PM , Rating: 1
I love how you think Microsoft doesn't completely own the Enterprise market..just wow.

I knew you were an Apple homer when you started your "I made a small fortune off their stocks" nonsense, but now it's pretty clear who's buttering your bread.

Enjoy your Angry Bird's while people who want a tablet for real work will be using something else.

RE: Enterprise
By Acupuncture on 7/24/2014 3:16:59 PM , Rating: 1
Microsoft makes the majority of their profit from Enterprise. Therefore, they have everything to lose. Apple's enterprise penetration hangs at about 20%, so in essence they have everything to gain. Considering that Surface was a pretty massive failure (I actually like the Surface 3), and the recent 18,000 firings the company just went through, it's safe to say that Microsoft is in a bit of a transition period to say the least. The anti-Apple sentiment on Dailytech is humorous, but we all know how healthy the company is.

RE: Enterprise
By Reclaimer77 on 7/24/2014 3:23:25 PM , Rating: 2
The "failure" of the Surface had nothing to do with Microsoft's viability in the Enterprise market.

And not even I would call the current generation Surface tablets "failures". They're doing pretty good.

The only limitation is X86 hardware, and that's reaching parity with ARM SoC's at an alarming pace.

Why the hell would anyone want an iPad for Enterprise work when soon we'll have full-fledged Windows PC's in the same form factor? Yeah, think about it.

RE: Enterprise
By Acupuncture on 7/24/14, Rating: -1
RE: Enterprise
By Reclaimer77 on 7/24/2014 4:02:55 PM , Rating: 1
What planet are you from?

RE: Enterprise
By atechfan on 7/24/2014 4:41:35 PM , Rating: 2
8.1 was free because it was a service pack, which have always been free for Windows. I think you are getting confused with Apple's yearly charging for MacOS service packs.

RE: Enterprise
By Scott66 on 7/24/14, Rating: -1
RE: Enterprise
By Cloudie on 7/24/2014 9:58:53 PM , Rating: 2
Mavericks was free. It was much more than a service pack too - the battery life increases are fantastic.

RE: Enterprise
By nikon133 on 7/24/2014 6:01:07 PM , Rating: 3
It is much more of "who needs" than "who wants". Group policies, centralised management and full access to corporate infrastructure - AD, specialised servers, printers, network shares... these things are just not possible on ARM tablets.

We have some customers who are using iPads and Androids, but usage scenario usually boils down to checking email when away. Maybe this MS Office for iPad will boost usage further, but it hasn't happened yet - we are yet to sell first Office 365 for iPad.

On the other side, we have couple of Lenovo ThinkPad Tablets 2 in wild. They are joined to the domain and some customers are taking advantage of that - when doing VPN to corporate network, device's domain membership is required for full access, in combination with SafeWord or Yubico tokens and usual domain credentials. If customer tries to access network from machine without membership, he gets only limited access to web mail.

A lot of other scenarios that simply don't work if device is not Windows machine. There are workarounds for some situations, but they usually require parallel solutions for different scenarios, which ends up complicating things further. Having standardised platform for devices is really the way to go.

Surface is only one available x86 tablet. Lenovo claims that their new ThinPad Tablet 10 sells well. x86 tablets are also available from Asus, Samsung, Acer, HP, Dell; a lot of price and performance levels to choose from. As additional benefits, some of these tablets have docking station options (which enables big screen, lan, additional USB ports and desktop keyboard/mouse connectivity) when tablet is used in Office, basically making it into basic desktop or thin client... USB ports are also common and are required for some secure access tokens, like Yubico... etc. etc.

Windows 8 and 8.1 GUI are unnecessary in desktop, but they work quite nice on tablets. I'm yet to see Windows tablet user who is unhappy with it, even if some of them originally approached us with idea to use other tablets instead.

RE: Enterprise
By Reclaimer77 on 7/25/2014 8:41:03 PM , Rating: 2
Here's another reason why the iPad sucks for doing work: not enough RAM and horrible memory management.

Seriously you open an app to do work, and iOS decides to crash THAT app if the OS runs out of RAM. Not some background app, nope, the app you just tried to open! I see it happen on the iPad ALL the time.

Hey retards at Apple, it's called "virtual memory". Figure it out.

RE: Enterprise
By retrospooty on 7/24/2014 3:39:16 PM , Rating: 2
Do you really think MS can lose enterprise? We aren't actually talking the bulk of the enterprise server/workstation market here, we are talking the small part of "mobile enterprise". When these people get back to the office, they set down the tablets and get the real work done on a Windows PC. There is no replacing MS with mobile, mobile is simply "in addition to" what already exists.

RE: Enterprise
By Acupuncture on 7/24/14, Rating: 0
RE: Enterprise
By retrospooty on 7/24/2014 4:26:16 PM , Rating: 2
Okeedokee... Will take note when and if that starts to happen in any significant #'s.

As for now don't forget, every iDevice, Mac, Android phone and pretty much every other major product on earth is made in factories that run their entire businesses of MS PC's. Every planning, purchasing, inbound logistics, warehousing, shop floor, shipping, accounting, reverse logistics, CRM software etc etc... It all runs on MS software. No one has even begun to think about transitioning that. What you are talking about is just a tiny corner of enterprise.

RE: Enterprise
By nikon133 on 7/24/2014 6:23:43 PM , Rating: 2
You are forgetting something. Tablets are becoming faster, but laptop/desktop usage is evolving, too.

With increased affordability of LCD monitors, pretty much every new desktop or laptop we deploy nowadays is going out with two screens and dual monitor desktop arm. All the laptops we sell nowadays must have docking station option available - this requirement is above performance, HDD size... most office jobs can be done on i3 just as well as on i7, and with network homedrives, size of local storage is not too critical... but noone wants to fiddle with plugging and unplugging lan, keyboard, mouse, local printer, monitor... whenever they put their laptop on desk or take it away.

I'd say 2 monitors setup is boosting average enterprise staff performance more than any other hardware advance in the last 5 years, easy.

At some time in future tablets might offer docks with PC-grade connectivity - some Windows tablets already do - but combination of that and software platform requirements will just NOT make ARM tablets as applicable as Windows machines, even if raw performance gets into the zone.

RE: Enterprise
By KoolAidMan1 on 7/24/14, Rating: 0
RE: Enterprise
By w8gaming on 7/24/2014 10:46:49 PM , Rating: 4
Apple fans keep talking about the 3 sectors which actually has some iPad adoption while ignoring the rest of the world which still find no use for iPad in their enterprise, and already jump to conclusion and claim Apple owns 20% of the enterprise market and seriously threaten Microsoft dominance in the enterprise market. While I think Microsoft needs to worry about the IBM alliance with Apple, it is still too early to make such claims. IBM might come up with means to enable iOS to seamlessly access the resources of Microsoft's dominated ecosystem. Best things Microsoft should do is to create development technology for developers to easily deploy enterprise solutions in mobile form factor. Whatever can be done for the healthcare, aviation or point of sale can just easily be done on RT or even Atom based Windows tablets. Microsoft just have to convince the developers it is the better way and possibly even the cheaper way to do the same.

RE: Enterprise
By ven1ger on 7/24/2014 3:13:08 PM , Rating: 2
If I were to use a tablet for enterprise work, I'd probably just get a Surface 3, it'll run virtually everything that I have to do anyway.

You comment that Android tablets are cheap pieces of crap, but easily sidestepped that the I-pad is made up with companies that provide the similar cheap pieces of crap for the I-pad.

RE: Enterprise
By Gio6518 on 7/24/2014 5:01:18 PM , Rating: 2
Apple gets all the money???
Maybe you can say that if they actually made the hardware... Samsung not only makes profit from their sales but also makes money from Apple since gets their hardware from Samsung in the first place..

RE: Enterprise
By hpglow on 7/24/2014 3:43:59 PM , Rating: 2
Because China's economy has done so poorly with their short leashed version of capitalism. Not that you know what real communism is. As there never has been a true communism only totalitarian dictatorships.

RE: Enterprise
By tonyswash on 7/24/2014 6:56:12 PM , Rating: 1
Sure they have a lot of room to grow in the enterprise sector, when you're on the bottom there's nowhere else TO go...

The topic here is tablets (which are related to the mobile device sector in general) and here Apple is on top in enterprise adoption and Android and Microsoft are struggling to catch up.

However Apple has only scratched the surface (no pun intended) of the potential enterprise device market and the IBM partnership should help Apple realise more of that potential.

Here is an interesting article, written before the announcement of the Apple-IBM partnership, on the way IBM's Watson and Apple's Siri might compliment each other in the Health sector. It's example of what the IBM-Apple might deliver (as long as it is not fumbled).

If you are unfamiliar with IBM's Watson system then have a look at this video (and think about this connected to iPads in the work place).

Ben Thomson has a thoughtful analysis articles on the IBM- Apple tie up here.

Here is a quote from his article:

Apple is in a fascinating position when it comes to the enterprise: it turns out that iOS is the best choice for enterprise from a product perspective. Blackberry has the integration, but everything else is obsolete; Android has less-effective device management built in and suffers from the usual Android fragmentation issues (which are improving), while Windows Phone, shockingly, has only in the last update added basics such as VPN support.

However, especially in the enterprise, product is not enough; in fact, very few devices are sold to enterprises as-is. Rather, they are delivered as part of “solutions”, the total cost of which is multiples greater than the underlying device. These “solutions” include things like custom software, implementation, training, consulting, and service contracts. Each of these pieces is fully customizable and negotiable for each enterprise customer, and it is for this you need a massive sales force. Ultimately, no matter how good of a product the iPhone may be, without the sales force and willingness to build “solutions” – the right go-to-market, in Cook’s words – Apple was never going to fully realize the enterprise opportunity.

RE: Enterprise
By themaster08 on 7/25/2014 2:00:16 AM , Rating: 2
One thing that you seem to completely overlook is that Microsoft already have a huge presence in cloud enterprise, which is showing no signs of slowing. Azure is the backbone to many of, not just Microsoft's, but its competitiors, services (iCloud for example).

This is an area which Apple has absolutely zero presence. It will take a lot for the Apple-IBM alliance to even disrupt this market, where Microsoft and Amazon seem to be trouncing the competition.

My point is that many of Microsoft's services are already available on the iPad. With their new strategy of being more open, this is an area that will only continue to grow in Microsoft's favour as they continue to develop more services and applications for the iPad.

Another thing your friend Ben Thomson completely overlooks is Windows 8/8.1 tablets. Claiming the iPad has the best enterprise features, whilst completely overlooking a full-fledged Windows OS loses all credibility.

RE: Enterprise
By tonyswash on 7/25/14, Rating: 0
RE: Enterprise
By atechfan on 7/25/2014 5:35:57 AM , Rating: 2
Windows 8.1 (snappy title BTW, it really emphasises the distance between the new release and the old version 8 :)

Huh? It is bad for MS to use a point release? How long has Apple been using OSX 10.x? Since 2001.

RE: Enterprise
By tonyswash on 7/25/14, Rating: -1
RE: Enterprise
By retrospooty on 7/25/2014 8:24:32 AM , Rating: 2
"Actually OSX releases are always universally known by catchy names, previously based on cats and now based on places in California. Although I think Apple will skip the Death Valley release :)"

Next stop: Burbank

"Apple doesn't have to emphasise the big step change in any OS release in order to overcome the poor reception of the previous OS release, unlike Microsoft"

That is one area you have to commend Apple for. they managed to explode into mobile and not totally break the UI for their existing laptop/desktop market. Sounds easy but... They did it and MS didn't.

RE: Enterprise
By tonyswash on 7/25/14, Rating: -1
RE: Enterprise
By retrospooty on 7/25/2014 10:12:37 AM , Rating: 2
Yeah it works. I am actually originally from the Bay area, the wife is actually from San Francisco... When being more polite, it's Snob Hill, when less polite, the nob becomes more phallic. Either way it fits hehehe ;)

RE: Enterprise
By tonyswash on 7/25/2014 11:40:07 AM , Rating: 1
I haven't been to San Francisco (or the States in general) for four years, I really miss that city, California and the fantastic National Park you guys have.The last US road trip we did was 10,000 miles all over the southwest. If we can get the dough together me and the wife want to do one more big US road trip before our knees get too old for serious the hiking.

Here's a photo I took of Mono Lake in 2007

RE: Enterprise
By retrospooty on 7/25/2014 1:28:36 PM , Rating: 2
Nice... Yup, there are some simply breathtaking natural wonders to visit in the US. Yosemite and Sedona are two others to hit if you havent yet.

RE: Enterprise
By tonyswash on 7/25/2014 3:11:03 PM , Rating: 2
Nice... Yup, there are some simply breathtaking natural wonders to visit in the US. Yosemite and Sedona are two others to hit if you havent yet.

Done them both several times - wonderful. My favourite is the lesser known Capitol Reef National Park in Utah, stunningly beautiful slot canyons.

RE: Enterprise
By retrospooty on 7/25/2014 4:18:26 PM , Rating: 2
Cool... I live real close (in AZ now) but have still never been to Utah. Hopefully in the next few years I will get up there.

RE: Enterprise
By damianrobertjones on 7/24/2014 3:06:26 PM , Rating: 2
What you DON'T see reported, for some reason, is IBM working with Microsoft to get the Surface devices into their business.

Why didn't every tech site post that article? Oh yeah, we all know why... .

RE: Enterprise
By EasyC on 7/24/2014 3:48:47 PM , Rating: 2

[Company Executive]: So we can spend 1000$ on a 128GB iPad and hope we can rewrite/buy enterprise apps to work with our infrastructure, or we can spend 1000$ on a 128GB Surface Pro 3 and spend much less time and resources on integration...

[Other Company Executive]: But iPads are so cool! We can watch Netflix on them... and uh... open word documents... and... see email!

Let's face it... Apple has little chance of making a significant dent in the enterprise market for windows based companies. The Pro 3 is a much more useful enterprise tool for a similar price and it costs MUCH less to integrate into existing infrastructure.

RE: Enterprise
By Acupuncture on 7/24/14, Rating: 0
RE: Enterprise
By gixser on 7/24/2014 4:05:41 PM , Rating: 2
resale value the Enterprise?


RE: Enterprise
By Acupuncture on 7/24/2014 4:06:47 PM , Rating: 2
Do you think they just hold onto them until it explodes?

RE: Enterprise
By ritualm on 7/24/2014 4:14:29 PM , Rating: 2
You can't wait to see Microsoft fail and Apple win.

You own Apple stock.

Hail, Conflict of interest.

RE: Enterprise
By Acupuncture on 7/24/2014 4:18:28 PM , Rating: 2
I own Microsoft stock as well. The last thing I want to see is Microsoft go down, but I'd like to see them innovate with their OS again.

RE: Enterprise
By atechfan on 7/25/2014 5:41:41 AM , Rating: 2
It seems to be that the problem that most people had with Windows 8 is that they innovated TOO much.

RE: Enterprise
By Cheesew1z69 on 7/24/2014 4:18:22 PM , Rating: 2
Yes? Most companies hold on to the devices they own as long as possible.

RE: Enterprise
By gixser on 7/24/2014 6:28:15 PM , Rating: 2
Exactly. You've got to get rid of them.

How do you do that when you have a few hundred/thousand of them? When they have to be gone within a period of days? From potentially diverse locations?

How much do you think you get for a 3-5 year old iPad in such a scenario? Do you think its a meaningful amount?

Please share your secrets.

RE: Enterprise
By retrospooty on 7/24/2014 6:52:46 PM , Rating: 2
Most companies keep PC's, phones and tablets as long as they are useful then scrap it once it's old and off the books. For the most part, it's not sold pther than a rare exception it's just given to whoever or to a scrap dealer at no cost.

RE: Enterprise
By w8gaming on 7/24/2014 11:28:32 PM , Rating: 2
If you have worked in Enterprise and understand the concept of depreciation and writeoff you will know all those iPads and tablets eventually has zero value in their book. It is treated just as other fixed assets such as cars, furniture etc which is an expense that run downs its value to zero. Resale value is never top priority. And how much do you think a 3 years old or 5 years old tablet will get in the market? Those are considered junks and sometimes just rot away in a store room or be thrown away.

RE: Enterprise
By retrospooty on 7/25/2014 11:40:18 AM , Rating: 2
Exactly... Most companies use it until it's not useful and then give it way. Either to employees, or local charities, schools, churches, or in many cases, scrap dealers come and haul it off for free.

RE: Enterprise
By atechfan on 7/25/2014 5:39:46 AM , Rating: 2
Eneterprise uses hardware basically until it doesn't work anymore or is so obsolete no one wants it. Then they pay someone to have it disposed of. There are companies whose entire business is secure disposal of enterprise machines. They don't "resell". Occasionally, some of the hardware gets donated to education after it is wiped, but most of it ends up going to recycling facilities.

RE: Enterprise
By EasyC on 7/24/2014 4:15:04 PM , Rating: 1
The Pro 3 has been reviewed to have a higher build quality than an iPad.

But you're right, there are a lot more dumb Apple fans who are willing to overpay for used products. Or maybe they are smarter Apple fans, buying a used product for the cost of a comparable new product that doesn't have the fruity logo on the back....Hmmm

RE: Enterprise
By captainBOB on 7/25/2014 12:57:49 PM , Rating: 2
You are assuming that there is a level headed executive that doesn't want the latest shiny.

It sucks to be just an IT grunt that can't make any overarching decisions for your infrastructure doesn't it?

RE: Enterprise
By Rukkian on 7/25/2014 3:23:10 PM , Rating: 2
I work for a medium sized (~900 employees) insurance company, in IT and just got the mandate that we will be taking away all laptops, and giving each previous laptop user (~170) a new desktop and ipad. We have no choice (nor do the users) as somebody high up was able to sell that they do everything we could need. We are having our logo put on the IPAD (at a higher cost of course) adding BT keyboard, cover and apple care, bringing the cost of each one to over $1k, plus the $800 desktop, meaning it will cost quite a bit more than just having the laptop in the first place.

Several of us in IT figure it will bomb completely, but were not asked, and were told we did not have a say in the matter. Since we have a corporate policy that any mobile device that hold corporate data has to be encrypted, the plan is they will not be allowed to have data on them, and will instead only use them to citrix into their desktop in the office. This means they will be using a 10" touch screen to remote control a device with (3) 22" widescreen monitors (everybody in the company that wanted them got the 3 monitors over the last year).

There were even several laptop heavy groups asking to least look at the Surface, and again were told absolutely not, no way we can use anything other than an IPad.

My point is that there are executives that are falling for the "there's an app for that" idea and that everything can be done on an IPAD. In reality, I don't see any arm product (android, ios, or WinRT) being anything more than a media consumption device. While there are fields where it may make sense (POS, Medical, and maybe even manufacturing), when it comes to a standard corp environment, I just don't feel it is worth it.

RE: Enterprise
By w8gaming on 7/26/2014 3:50:58 AM , Rating: 2
Exactly. I know this is happening to a few companies when some top executive strong arm the IT guys to accept such policy. That's why I think Microsoft should really do more PR to the top executive people.

RE: Enterprise
By retrospooty on 7/27/2014 8:42:54 AM , Rating: 2
I am sure that happens, and it sucks, but what that is is a fail by the IT management to successfully talk sense into upper management. That can happen with any product if management isn't in step with tech. You either need IT leadership that is stronger and/or more convincing, or go work for a company who's exec's aren't asshats.

RE: Enterprise
By EasyC on 7/25/2014 10:31:08 PM , Rating: 2
Luckily I'm not that helpless. I'm piloting the Surface Pro 3's for my company. When you start talking about costs in terms of FTE's to execs, they tend to listen a bit more...

By name99 on 7/25/2014 1:19:05 PM , Rating: 3
As we noted in the Apple earnings article, IDC reports that tablet sales in part are being affected by the growing appeal of “phablet” devices. “The market [is] being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles,” said IDC’s Jean Philippe Bouchard.

Look, regardless of whether you love or hate Apple, Jean Philippe Bouchard is talking out his ass.

(a) "longer than anticipated ownership cycles" Longer than anticipated by whom? Jean Philippe Bouchard?
It was (and remains) obvious to anyone with a brain that devices that aren't on an artificial carrier-driven upgrade cycle would have much longer active lifetimes. The first two iPads were clearly being pushed too hard, but with the third generation (the first Retina iPad, 2012) we had a device that was probably usable for many years by most people; same in the Android market.

(b) The first phablet came out in 2007, they've been common place since 2010. It's a strange thing to start blaming them NOW for tablet sales.

The actual story here is quite simple.
- Tablets (in their modern form) debuted in 2010.
- Analysts fell over themselves with excitement at the claim that they were going to change the world, they were the second coming of the netbook, a chicken in every pot and a tablet in every hand.
- Reality is that tablets have a nice set of uses, but are no replacement for PCs. They also last a long time (like PCs) and have got to the point where they're mostly good enough (like PCs). Which means that after the initial surge to cover the market, they are now more in maintenance mode, like the sales of any white good.

But to tell this story would require analysts to admit that their initial ideas about the triumph of the tablet were idiotic, and we can't have that. So instead we get a tissues of stupid excuses about why the tablet market is "slowing down".

"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke

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