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Motorola Xoom needs a price cut  (Source: Motorola)
Android tablet shipment forecast cut as iPad shipment expectations grow

The tablet market is growing by leaps and bounds and Apple with its iPad is the source of much of that growth. There are a number of Android tablets on the market today, but they aren't selling well and some users are complaining about the Honeycomb operating system and the availability of tablet-specific apps.

Analysts have agreed that the tablets are taking market share from the notebook and netbook, but the outlook for tablets overall has taken a downturn recently. The reason that the estimates for overall shipments by analysts are changing has to do with the sinking popularity of Android tablets. While Android offerings are seeing estimates for shipments cut, the iPad is actually being increased.
Jefferies analyst Peter Misek noted about six months ago that the forecast for 2011 tablet sales was 100 million. After a recent poll of consumers, Misek has changed his predictions by a whopping 30% reports eWeek. He believes that 70 million tablets shipped is a more realistic expectation.

Misek wrote in a research note, "We now believe 70 million to be more realistic due to: 1) Android 3.0 Honeycomb needing polishing, and 2) Android tablets that are priced too high."

Misek also thinks that if tablet makers like Motorola and Samsung want to compete with the iPad, they are going to need to take a hit and cut the price. Bill Shope from Goldman Sachs also lowered the overall estimates for tablet shipments in 2011 and 2012. The decline was due to reduced estimates for Android tablets, the estimates for iPad shipments actually increased.

Shope wrote, "Our iPad forecast remains unchanged, though we have lowered our non-Apple tablet unit assumptions by 2.3 million units in 2011 and 2012." He continued, "Meanwhile, we have raised our forecast for Apple's tablet market share to 66.4 percent in 2011 (64 percent prior) and 66.6 percent in 2012 (65 percent prior). Overall, we are expecting 57.7 million total tablets for 2011 and 78.0 million tablets for 2012, versus 60.1 million and 80.3 million previously."

NVIDIA CEO Jen-Hsun Huang has also said that for Android tablets to be competitive, they need to be cheaper. NVIDIA has a vested interest in the Android tablet market since his company makes the Tegra processors that many of the newest Android tablets use.

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RE: This is not surprising
By Tony Swash on 5/18/2011 3:19:41 PM , Rating: -1
I think you guys are missing the point. Personally I think that the tablet market will be a lot more like the mp3 player market than the phone market (for lots of reasons and primarily because of the difference in channels) and so I would not be surprised if Android tablets never catch up and Apple ends up with a more less permanent 70% plus of the tablet market. But that's not the point either.

My point is this. Look at it from the point of view of the average consumer. Someone who doesn't read sites and forums like this one. Someone who may have heard of Apple and Google but probably doesn't know much about the technical differences between Android and iOS. If an average consumer like that were to go onto Google and ask the sort of questions I posed they would get the sort of answers I proposed. Some of the answers they might find might not be so cut and dried as I presented them but they are not far off. The reasonable conclusion would probably be that on the whole and on balance at the moment the iPad is a better value proposition than any Android device.

Plus of course if they lived within striking distance of any of the hundreds of Apple stores they could go and play with an iPad in a very welcoming environment where there would be lots of friendly members of staff ready to spend a lot of time helping them make the right decision. That's why Apple built those stores.

So is it surprising that Android tablets are struggling? Just like with the iPod where each new "iPod" killer was greeted as the one that would work, where there were gushing comments about how superior they were, how well they were selling, and then the reality would eventually emerge that yet again they had not dented the iPod sales, that they were not the iPod killer. I sense the same sort of dynamic with the iPad and tablets.

Currently Apple is selling iPads as fast as they can make them. The demand is much greater than the supply. Can you imagine how many they will sell when they get their supply chain ramped up and recovered from the earthquake?

RE: This is not surprising
By Pirks on 5/18/2011 4:10:09 PM , Rating: 2
Can you imagine how many they will sell when they get their supply chain ramped up and recovered from the earthquake?
Can you imagine how Asus Transformer tablet will sell when they get their supply chain ramped up?

RE: This is not surprising
By Tony Swash on 5/18/11, Rating: -1
RE: This is not surprising
By Pirks on 5/19/2011 9:59:17 AM , Rating: 1
There were times when Windows PCs were sold in quantities 10 times less than Macs. Don't forget lessons of history Tony!

RE: This is not surprising
By Tony Swash on 5/19/2011 11:05:46 AM , Rating: 1
There were times when Windows PCs were sold in quantities 10 times less than Macs. Don't forget lessons of history Tony!

Only after Apple had been run by bozos in suits for a decade.

Not so many bozos at Apple now :)

RE: This is not surprising
By Pirks on 5/19/2011 2:32:38 PM , Rating: 2
Yeah, but Jobs is not going to steer Apple forever, you know

RE: This is not surprising
By themaster08 on 5/19/2011 3:09:49 AM , Rating: 2
I believe that the Transformer will set the benchmark for Android tablets, and force current manufacturers to rethink their ideas. It is the only tablet so far that I have actually been interested in, and think has a chance of being hugely successful.

I believe it will spur on a whole new wave of tablets with similar functionality. This sort of tablet may spur on an array of new applications that require a more precise input method, thus also appealing to content creators.

Using a detachable keyboard and trackpad dock, Android tablets will be able to surpass the iPad in terms of features, functionality, content creation, and also achieve battery life the iPad could only dream of. The Transformer has shown that all of this is possible now.

There is so much potential for Android tablets. Manufacturers need to stop living in Apple's shadow and actually innovate. That, and they need to seriously work on their pricing model. This is their chance to actually differentiate themselves from the iPad, and bring something to the table that is more capable, and better value for money.

If tablet manufacturers can drop their prices to those of netbooks, they will find themselves in a much better position, and also consume the remainder of the netbook market. Until then, the iPad will continue to sell in its droves, continue to have a stranglehold on applications and become more and more of a household name.

It's simple - make sure your tablet brings something new and different, create a pricepoint that cannot be matched, make sure you have the supply chain to cope with the demand, have a simple naming convention for your tablet so that people remember it, and market the hell out of it so that people know it actually exists.

RE: This is not surprising
By mvagusta on 5/18/2011 4:22:11 PM , Rating: 2
IMO a big part of the future Android Tablet base are current Android phone owners. For an average consumer that does not dig into the details of what they are looking to buy in a tablet, Apple's marketing machine and overall desirability will likely win them over to buy an Ipad. But for the same reason a lot of people are buying Android phones rather than Iphones, there exists huge growth potential for Android tablets. The main problem with the current offering of Android tablets is price. The point is that with Android tablets (like phones) there are multiple options and offerings, the prices will likely come down as the OS and hardware gets more impressive. The Android Market will get more and more apps to compete with Apple. The MP3 player market ultimately stayed with Apple because nowadays people use their phones to play music - many of those phones are Android handsets, so I don't think that market is a fair comparison to this one. I love our Ipad2 but honestly by biggest gripe with it is that fact that you cannot simply connect a USB drive to it to access files like you should be able to. Typical Apple strategy, you need to buy a special connector package and that adapter only let's you read image files. It is for reasons like this that Android and Windows tablets will always have an interest with consumers.

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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