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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RE: My analysis...
By Tony Swash on 11/5/2012 7:44:38 PM , Rating: -1
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.

An almost entirely fictional account of history. Apple never had much more than 25%of the market share of PCs at it's absolute best point. The Mac had a greater market share in 1997 when it almost went bust than in the entire subsequent decade. Apple nearly went bust because it was very poorly managed not because of small market market and tried to compete with the WinTel market on their terms rather than on Apple's terms.

Once the Apple management had been sorted out and it once again focussed on producing Macs that were distinct and that could be sold at a profit it stabilised it's PC business. Apple's current Mac business is probably the most profitable, and one of the largest, PC businesses and yet the Mac market share though growing is still not very big.

Market share, profitability and business success have never had a simple one to one correlation in the computing business. It's possible to sell lots of computers, or phones, or tablets and to have a large market share and to flounder as a business, the opposite is also true.

The way a company can succeed as a large global player in the new mobile device markets is a complicated matter and at the moment several different strategies are being tried. It's almost certain that more than one strategy will offer survival in the new device markets but it's not clear which ones will be best longer term.

So far only Apple and Samsung have succeeded in building large scale profitable businesses in the device markets. Microsoft and RIM have failed (so far), Amazon has succeeded in only just breaking even and Google has sunk a fortune into Android without getting much back. The rest of the Android and PC OEMs have been largely unsuccessful at building growing and profitable businesses.

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.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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