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Still a long way from iPad sales figures

Typically, ASUS and Google keep sales figures very hush hush. ASUS makes the Nexus 7 tablet for Google and recently an executive told the Wall Street Journal some of the most detailed information on sales statistics for the Nexus 7 tablet so far.

ASUS CFO David Chang said, "At the beginning, it was, for instance, 500K units a month, then maybe 600, 700K. This latest month, it was close to 1 million."

The seven-inch Nexus 7 tablet starts at $199 and the sales figures were offered during the Q3 earnings call this week.

Previous Q3 sales estimates for the Nexus 7 tablet estimated sales of between 800,000 and 1 million units for the entire quarter. Chang's comments suggest that ASUS and Google have sold significantly more Nexus 7 tablets than previously believed.

While sales estimates for the Nexus 7 tablet appear to be significantly higher than previously expected, they're still a drop in the bucket compared to the volume of iPads Apple is selling. Q3 sales numbers for the iPad is pegged at 14 million units. The overall tablet market during the quarter shipped 25 million tablets globally. That means more than half of all tablets sold around the world were Apple iPads.

Many expect Apple to grab even more of the tablet market with the launch of the iPad mini. The new smaller and cheaper Apple tablet doesn't appear to be as good on paper as some of the Android offerings already on the market, but Apple has proven time and again that its brand cachet lures users to pay more money for its products.

Google also recently unveiled more Nexus devices including a Nexus 4 smart phone and a Nexus 10 tablet.

Source: Wall Street Journal

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Interesting definition of drops and buckets
By Solandri on 10/31/2012 11:35:04 AM , Rating: 5
While sales estimates for the Nexus 7 tablet appear to be significantly higher than previously expected, they're still a drop in the bucket compared to the volume of iPads Apple is selling. Q3 sales numbers for the iPad is pegged at 14 million units.

14 million in a quarter is 4.7 million a month. 1 million vs. 4.7 million is a drop in the bucket? You must have very small buckets.

The overall tablet market during the quarter shipped 25 million tablets globally. That means more than half of all tablets sold around the world were Apple iPads.

Oddly, the media has not been reporting this. Since the iPad came out, its share of the tablet market has gone from 90%, to 75%, to 65% earlier in the year, and now 14 million / 25 million = 56%. All the more remarkable since 2012Q3 was the first full quarter the iPad 3 was available worldwide. That's a pretty clear downward trend that you never see reported. (Or to be more precise, growth in non-iPad tablet sales far exceeds growth in iPad sales.)

To me, this is math 101 when analyzing market trends. No hype, no spin, pure numbers and trends. You look at absolute sales vs. historical, and you look at market share vs. historical. For some reason, the latter has been almost totally absent in the media when reporting on the iPad and iPhone. When market share is even mentioned, it's always in a positive light for Apple (e.g. "more than half of all tablets sold around the world were Apple iPads"). It's like basic market analysis skills go out the window when reporting on Apple products.

RE: Interesting definition of drops and buckets
By jimbojimbo on 10/31/2012 11:48:37 AM , Rating: 2
Also they keep comparing Apple exclusively to other manufacturers instead of the OS in general. It's as if they're trying to say we're beating company A so we're still good although company A+B+C+D+E+F+G+H+I are combined reducing their market share rather quickly.

By tayb on 10/31/2012 8:15:24 PM , Rating: 4
If you wanted to do an OS comparison you would need to tally all products sold running that OS. For Apple that means iPod Touch, iPad, iPad Mini, and iPhone. For Android this would mean all phones, MP3 players, and tablets. Then to get an OS market share you would need to know which devices are running which versions of the OS. Pretty simple for iOS, not so much for Android.

And then the end result would be less interesting. At least in my opinion. I think a much more interesting metric is Apple vs All in tablet sales.

By Schadenfroh on 11/2/2012 6:32:26 AM , Rating: 2
Works for PC versus Console game sales!

PC gaming is dying because fewer PC games are sold than Xbox, PS3, Wii, Gameboy games combined.

RE: Interesting definition of drops and buckets
By Gio6518 on 10/31/2012 12:11:39 PM , Rating: 3
Pretty much...Android is poised to overtake Apple in the tablet sector......probabaly 2nd or 3rd quarter 2013

By NellyFromMA on 11/1/2012 12:47:10 PM , Rating: 2
Overtake in what sense? Market share or profits?

Apple can outlast Google financially in their respective business models. The market penetration is somewhat invain there, especially when you consider Android has demonstrated a tendency to be slow about getting its updates to devices, but also that certain devices could be imcompatable with any of those devices, there in mitigating or nullifying shares of their own market.

Even if Android is on more devices than iOS, it is not the only metric, orperhap not even the most important metric, because of the business model Google has chosen and its demonstrated actions in the market.

RE: Interesting definition of drops and buckets
By aliasfox on 10/31/2012 1:36:40 PM , Rating: 2
I would love to see the difference between shipped and sold. There might not be a difference with Nexus7, Kindle, or iPad tablets, but other brands often have the issue of shipping items to store, only to have them languish on the shelves for months. We may not be seeing an HP tablet fire sale, but that doesn't mean that Acer or Samsung with its Galaxy 10 aren't hurting with channel backlogs.

Alternate questions:
- Does 25 million include ebook readers?
- Is there a breakdown on sales by price bracket and/or size? 5"/7"/9"-10" classes, $200/300/400/500/500+ brackets? I'd love to see how product planners are seeing these things rather than the high level numbers.

RE: Interesting definition of drops and buckets
By theapparition on 10/31/2012 9:16:44 PM , Rating: 3
Shipped vs Sold is one of those meaningless metrics that some internet conspirists like to mention.

When a box of Frosted Flakes is sent to the local grocery store, it's because the store bought it. They looked in their inventory system, determined the need, and placed an order with Kellogs.

If that box of cereal sits on the shelf, then it's not Kellog's issue. Kellogs got the sale, and the money. Now the store may clearance it before it's expiration date, but it's not like Kellogs is accepting the return of the cereal box. Of course Kellogs sales next quarter would be signifigantly down if they aren't getting any more orders.

This of course is a dramatic oversimplification, but you see how dumb a "shipped vs sold" metric becomes. A company gets credit for the sale, as they should. Next you look at trends from quarter to quarter with guidance to see if they are still moving product.

Two quarters ago, we got the same internet argument about how domestic automakers didn't really "sell" more cars, they just shipped more to dealers and inventory was sky high (even though dealers must buy those cars). They looked like fools when the next quarters results came back as the trend was real and that dealer inventory actually sold.

You can see quite clearly the increase in quarterly sales of the Nexus tablet.

Not getting on you, but it's a tired argument, like hp/liter. As for your other question, the 25 million doesn't include e-ink ebook readers.

RE: Interesting definition of drops and buckets
By retrospooty on 11/1/2012 8:24:13 AM , Rating: 2
Exactly... In todays fast daily shipment market, and high inventory\tax costs, stores don't keep a lot of inventory. Most inventory isnt "lets buy up a 6 month supply" anymore, especially electronics becasue they devlaue so quickly... Its weekly small orders to backfill stock that actually sold. HP firesales are rare and only a result of extremely bad planning, timing and pricing (HP, Apothekar etc).

By retrospooty on 11/1/2012 8:24:59 AM , Rating: 2
derp... devlaue = devalue

RE: Interesting definition of drops and buckets
By aliasfox on 11/1/2012 1:09:38 PM , Rating: 2
Alright then, I'd honestly be interested in seeing how many were shipped to retailers who sell at/close to MSRP (like Best Buy, Amazon, etc) vs discount/last call style retailers (like Woot or something).

- I honestly don't see too many tablets out there that aren't Kindle ebook readers or iPads, and I notice when people have their tablets out on the subway
- I've seen a pretty big spike in iPods/Apple products on Woot in the past year. Maybe it was a Steve dictum not to put any Apple product in a clearance retailer, or maybe their inventory management is starting to frey at the seams

Regardless, I find it interesting.

And before I forget - I feel like I still see Galaxy 10.1" and occasionally Xooms in store displays - doesn't that suggest that these (ancient, by today's standards) tablets are still in inventory somewhere?

By retrospooty on 11/1/2012 1:55:41 PM , Rating: 2
"I still see Galaxy 10.1" and occasionally Xooms in store displays - doesn't that suggest that these (ancient, by today's standards) tablets are still in inventory somewhere?"

sure... just not alot, unless someone somewhere made a mistake on their inventory.

Anyhow since Enron, accounting practices for companies are monitored by auditing firms. It really is difficult to lie on a large scale. You can fudge #'s and pull in from next quarter or push out to next quarter, but you really cant do it for more than a few quarters... Eventually it all washes out. If a company says they are moving X amount its most likely very close to that amount. If not and mistakes are made they get massively dinged and taxed for excess inventory and you see things like fire sales, or like when RIMM lowered the price of its playbook from $500 to $200 overnight... My god, I just bored myself to tears. So glad I am no longer working in supply chain LOL.

RE: Interesting definition of drops and buckets
By Uncle on 10/31/2012 2:23:59 PM , Rating: 2
A number that would interest me is, how many sales of apple products are to regular apple buyers, repeat buyers vs new buyers.That would be hard to do I know. As an example, if a company has 25 million die hard apple buyers, wouldn't that make opening sales look better then they really are. Anyways something isn't right with a major employee shakeup at the top end.

By NellyFromMA on 11/1/2012 12:48:58 PM , Rating: 2
There are a growing number of Android fans that are mimicing that behavior as well. I'd say Apple has more of this but I would actually bet its nothing close to 2:1 ratio.

By melgross on 10/31/2012 4:02:07 PM , Rating: 1
Don't believe all you read about marketshare. For one, as we can see here, many of those numbers don't have the meaning you think they do. This article has confabulated the numbers. Somehow, as seems to happen all over, the word sold has been substituted for the word shipped, which is what Asus is actually claiming.

As we should all know by now, few companies sell as many devices as they ship. Last year, Asus was thought to be shipping 750 thousand tablets a month, but it was found to be incorrect, and most of what was shipped was sold off in the EU at bargain basement prices, as has happened to a number of other tablets, including Acer, during the same time frame.

In addition, when most companies use the words shipped, or sold, they are talking about distributers, retailers, and carriers, not end users. We don't know how many of those devices make it into the hands of a user, or get returned.

We can see from the lawsuits between Samsung and Apple how this works in some cases. Samsung doesn't give numbers of smartphones or tablets shipped or sold each quarter, so we rely on guesses made by companies such as IDC, Gartner, iSupply, etc. but when the numbers Samsung released during the trial were seen, they were less than half of what was estimated. In some cases, a third. As for tablets, the disputed models has just sold a total of 38 thousand in the US vs an estimated 750 thousand for those models, and an estimated 1.5 million shipped to the US for all their tablet models. And yes, Samsung did give correct numbers. We can be sure that Apple has a good idea of what they were, and would have protested during the trial for damages based on those numbers.

But have the companies such as IDC revised their US, and worldwide numbers for Samsung as a result of those numbers? No, they haven't, and so their estimates are suspect. The same thing is true for other estimates (guesses).

I doubt Apple has lost as much marketshare as is said, as everyone quotes the same incorrect numbers.

We see the same thing with computer marketshare. IDC estimated Apple as having risen to 13.5% in the US last quarter, and Gartner to 12.5%. But most other computer manufacturers had already reported their numbers, whereas Apple hadn't. So those percentages were resulting from estimates (guesses) of Apple's sales. IDC saying that Apple's sales dropped by 6+%. And Gartner by 9+%. That's how they derived the marketshare. But Apple's sales actually rose by 1%. Have they revised their numbers yet? No

So how can we rely on any of this stuff? We can't!

By Falacer on 10/31/2012 7:26:50 PM , Rating: 2
Would be interesting to see the number of Nexus 7 vs Kindle/Kindle HD units per month too.

RE: Interesting definition of drops and buckets
By NellyFromMA on 11/1/2012 12:44:04 PM , Rating: 2
Market share isn't the only relevant indicator. Sustainablity of market saturation is key as well as new versions of Android potentially isolating existing user base / devices which is almost non-existant on the Apple side.

Apple hasn't lost market share to viable competition on terms of profit, the only thing these business ultimately desire and in fact what keeps them going.

Google's push is not sustainable because its marketplace / appstore isn't desirable. They sell hardware at cost, so no profit and must gain profits via usage. Apple does not have this quandry and so any number of Android devices does not necessarily translate into a superior profit-generating market.

They can not penetrate the market this way longer than Apple can withstand it, especially when market perception is the iOS is superior to Android in terms of overall quality.

It IS math, just not basic math. If the only way Google can make inroads is to sell effectively subsidized hardware, that isn't a sustainable roadmap if you care about profits.

By Moishe on 11/2/2012 1:50:06 PM , Rating: 2
I agree, but Google can subsidize the hardware for a long time because each new device is a tie into their main money maker: advertising.

Yes Apple makes more profit, and in the end that's a winning bet, but Google isn't foregoing profit, they're just getting it through different, harder-to-track means.

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