Print 11 comment(s) - last by nafhan.. on Nov 6 at 3:10 PM

Samsung is among the big winners

According to the International Data Corp. (IDC), one of the world's largest sources of business analysis, the tablet market shifted dramatically over the last year.

A year ago nearly three out of every five tablets sold was an iPad (59.7 percent).  This year, as sales rose, Apple, Inc.'s (AAPL) share shrank – now; roughly 1 out of every 2 tablets is an iPad (50.4 percent).

Samsung Electronics Comp., Ltd. (KSC:005930) today accounts for nearly 1 in 5 units sold.  It has an 18.4 percent market share and moved 5.1m units in the quarter, despite bans from Apple hindering its sales in multiple key markets.

ASUSTek Computer Inc.'s (TPE:2357) now has 8.6 percent of the total market (2.4m units).  That was good enough to place ASUS into a virtual dead heat with, Inc. (AMZN) a newcomer that now holds 9.0 percent of the market (2.5m units shipped).  Amazon also uses Android, albeit a heavily modified version of that has branched off the base code.

The Hong Kong-based Lenovo Group, Ltd. (HKG:0992) cracked the top 5 with 400,000 units sold, which gives you an idea of how poorly the "other" OEMs -- such as Research in Motion, Ltd. (TSE:RIM) fared.

How Q4 will shape up, though, will be the really interesting thing to see.  Google Inc. (GOOG) will have to wait to see whether it gains or loses ground in the tablet market, as its new Nexus tablets take on offerings based on Microsoft Corp.'s (MSFT) Windows 8/RT.  But ultimately, the biggest loser may be Apple, as OEMs like Samsung and ASUSTek will be offering up twice the competitive offerings with Windows 8/RT designs alongside Androids.

Samsung tablets
Samsung tablets dominated in Q3, tripling their anemic 2011 sales.

Ryan Reith, the IDC program manager who published the report, comments, "Samsung took advantage of an opportunity in the second quarter. The company offers a wide range of tablet offerings across multiple screen sizes and colors, and that clearly resonated with more buyers this quarter. Its growth to 18.4% of worldwide market share during the quarter represents the first time a competitor has attained this level of share since the original launch of the iPad.

"Competitors are turning up the pressure on market leader Apple.  With the recent introduction of a number of Windows 8 and Windows RT tablets, consumers now have a third viable tablet platform from which to choose. However, price points are critical in tablets, and Microsoft and its partners will have a tough time winning a share of consumer wallet with price points starting at $500."

While Reith seems relatively pessimistic on Windows 8/RT tablets' pricing, another interesting emerging storyline is how tablets carrying Intel Corp. (INTC) chips (Windows 8) will fare versus tablets carrying the standard ARM Holdings plc. (LON:ARM) derived chips (Windows RT, Android, iOS).

Tablets with Intel chips thus far appear to be carrying a relatively hefty price premium ($200 USD or more), compared to their ARM counterparts, but will be substantially more powerful while offering similar battery life.

Source: IDC

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My analysis...
By nafhan on 11/5/2012 5:19:43 PM , Rating: 5 that these are more indications that the tablet market as a whole is expanding A LOT rather than Apple doing poorly.
--Apple is still raking in the lion's share of the income on tablet hardware sales
--Apple actually sold considerably more tablets over the period where it lost market share
--Apple has different goals than the $200 tablet competitors (i.e. they're hardware company)

Basically, Apple's doing very, very well in an expanding market. They just don't have clear control of the market anymore, and it's likely to stay that way unless the justice department decides Apple needs some help.

Also, I think the market share numbers are concerning to Apple, or they would not have released the iPad Mini. It'll be interesting to see how that impacts things. I personally think the iPad Mini is the most mediocre product in Apple's line up, but it's relatively cheap and it's got the logo... so, we'll see. iPad Mini = capitalism at work, which is kind of cool.

RE: My analysis...
By GulWestfale on 11/5/2012 5:35:22 PM , Rating: 2
all the above excuses could also apply to RIM. "yes the blackbaerry has lost market share, but the market is expanding faster than we are; and besides those customers that buy competing products are not our target market."

in the end, these numbers mean two things:
- android is slowly but surely catching up.
- more people are buying tablets.

one would need to see a market analysis to see whether people are buying tablets now because cheap, good android tablets are now becoming available, which would prove that apple isn't gaining as many new customers with its high priced, low-value ipads as google with high-value tablets like the nexus 7.

i guess we will have a bit more info on this (and on how the market develops) after christmas.

RE: My analysis...
By nafhan on 11/5/2012 8:40:05 PM , Rating: 2
RIM and Apple's positions really have little in common. Marketshare is only one number out of many to describe how well a company is doing, and honestly marketshare is about the only one where Apple is looking even a little bit bad.

I don't care for their products myself, but arguing that their business is about to go bust is crazy (and that's what you're doing by comparing them to RIM).

RE: My analysis...
By theapparition on 11/6/2012 10:40:14 AM , Rating: 2
Marketshare is only one number out of many to describe how well a company is doing, and honestly marketshare is about the only one where Apple is looking even a little bit bad.

Agreed in theory, but this market is a bit different from others, including the PC market.

The average lifespan of the new car is 8 years before buyers look for a new one. TVs and other home electronics are even longer. Even PCs are on a 4-5 year cycle now. Phones and tablets seem to have a 1-2 year churn rate. That's HUGE when it comes to the talk about current sales and market trends.

Within a few years, you can go from the dominant manufacturer to an also ran. We saw that happen both in a positive way for Apple and a negative way for RIM. Two years ago Apple was the market leader and now Android is outselling 5:1 for phones.

Certainly the market is expanding, but if market share trends continue unfavorably to Apple, they could find themselves on the outside looking at what could have been. I'm certainly not attempting to claim they are doom and gloom. They are making quite a bit of money on their products. But at the same time, with the high churn rate of these products, all it takes is consumer sentiment to shift and we can see dramatic changes in the phone/tablet landscape.

RE: My analysis...
By nafhan on 11/6/2012 3:10:33 PM , Rating: 2
I'm not saying things won't go bad for Apple. I'm also not saying they will go well. In fact, most of your points indicate uncertainty due to a rapidly changing market, and nothing more

Also, RIM never had anywhere close to the type of money that Apple has, right now. Apple's got national debt level numbers IN CASH sitting around. Apple could give away 600,000,000 iPad mini's ($120Bil/$200), or run the company at a loss for a really long time - just using the money in their cash reserves.

RE: My analysis...
By Helbore on 11/5/2012 5:37:24 PM , Rating: 2
I generally agree. This is how it went in the smartphone market. Apple lost marketshare as the market grew in size, but they still gained sales and remained profitable. They just didn't maintain their control of the market as it increased in size.

It is understandable why Apple would be concerned about such trends, though. It mirrors the early days of computing, where Apple were a major player until they were swamped by IBM PC clones running Microsoft software. Then, as their market share shrank, their platform became less desirable and they nearly went bankrupt.

The risk that the market might grow, but iOS gets left with a similar installed userbase is worrying for them. If that were to transpire, iOS would become less popular to developers. Whether history would repeat is debatable, but any exec at Apple with any sense would be wary of the past repeating itself (conversely, any exec who just assumed future dominance would deserve to get the sack).

RE: My analysis...
By Tony Swash on 11/5/12, Rating: -1
RE: My analysis...
By nafhan on 11/5/2012 9:06:35 PM , Rating: 2
Apple never had much more than 25%of the market share of PCs
I would certainly consider 25% to be a major player. I think it's been years since any single company has controlled even 20% of the market.
Google has sunk a fortune into Android without getting much back
The fact that Google gives Android away for free should tell you something about their goals in regards to Android. Google is an advertising company, and an advertising company that can't show anyone ads... is worthless . Android is Google's guarantee that they can continue to make money off their primary line of revenue as many people's computing and internet habits move towards mobile. That's where the value is, and, yes, that is much harder to translate into dollars than "number of iThings sold X profit per iThing."

RE: My analysis...
By Helbore on 11/6/2012 7:46:43 AM , Rating: 2
Apple were one of the first personal computer manufacturers, so obviously they were a major player.

The biggest hit to the Mac business was that it wasn't the "go to" platform for developers. Microsoft had cornered that and the lack of app compatibility with the larger market made the Mac less desirable. Its exactly the same as why iOS is successful right now - it has a massive ecosystem of third party software and continued developer support. That's what a large market share gets you.

Android has done the same thing to Apple in smartphones as Windows did in the PC space. It swamped the market with hundreds of devices and pushed Apple's market share down.

As I said before, that's not terrible news for Apple, as the market is expanding so they are still gaining more sales, even if their share is shrinking. But the more their share shrinks, the less desirable they will be to developers in the future.

That loss in market share is the weakness in Apple's business model (yes, I know there are strengths to their model, too, so don't go on about that like I don't "get it.") - the ecosystem of their competition is a single platform spread across many manufacturers. Without licensing iOS, there's no way they can compete on volume against so many competitors. Yes, they could be the single biggest individual device maker, but it is the software ecosystem that matters to developers. That's why the PC market is still dominated by Windows, even though Apple's Mac business might be profitable for them.

It's a distinct risk in their business model and their execs will be well aware of that. They are not rabid fanboys of their own company - their business people, intent on running (and growing) a business. The moment they rest on their laurels and assume the competition isn't a threat is the day they set Apple on a crash course.

I'm not saying it would destroy the company (it would take a lot to wreck a company with their bank balance), but just look at what usually happens to companies that assume they own the market and don't have to worry about the competition.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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