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Can Apple’s iPad quality win out over Android’s quantity? I’m not so sure

by Don Reisinger

August 25 2013

TabTimes contributor Don Reisinger is a New York-based technology writer who's work has appeared in CNet, eWeek and other publications.


Ask anyone working at some of the companies we cover in the technology industry about their thoughts on market share, and they’ll quickly tell you that it doesn’t matter nearly as much as consumers and we journalists might claim.

After all, they say, a company’s chief concern is profitability and not market share.

That has been a common refrain at Apple. For decades, the company has not judged its performance on market share, but rather its ability to generate staggering profits. That’s why Steve Jobs never got caught up in OS X’s market share compared to Windows, and why, despite Microsoft’s attempts to compare sales figures, Apple was content to generate billions of dollars in profits and laugh all the way to the bank.

My colleague, and TabTimes editor David Needle, recalls Apple’s philosophy holding strong back in the 1990s. At that time, Jean-Louis Gassee, Apple’s then-VP of Marketing, scoffed at the idea of Apple needing more market share to be successful in the computer space.

“I bet BMW is never asked at auto shows why it has such a low market share,” Needle recalls Gassee saying during a press event back then.

That same outlook appears to hold up in Cupertino today.

Still, market share matters. When companies like IDC, Gartner, and others release market share data, they’re providing valuable insight into consumer preference. And perhaps most importantly, they’re telling us about the key factors that might determine the fate of certain companies in the industry.

That’s why I’m wondering if Apple’s time-tested strategy of caring more about profits (or as they would insist, quality products) than market share can hold up in tablets. Yes, the company is selling boatloads of iPads, but will the sheer number of Android slates hitting store shelves around the world eventually put Apple’s sales philosophy to the test?

Before you shrug it off and say Apple’s past success should be an indicator for the future, consider this: Apple’s worldwide market share fell during the second quarter from 60.3% last year to 32.4% this year. What’s worse for the company, its total shipments fell from 17 million in 2012 to 14.6 million last quarter.

Android is growing while iPad's share of the market slips

It’s worth noting, of course, that Apple launched a new iPad during the second quarter of 2012, which caused some disparity between the figures, but it doesn’t answer one major issue: Android market share grew from roughly 30% to 35% of the market in 2012 to over 60% this year. In other words, more people than ever are buying Android slates.

It’s perhaps also informative to look at China – widely believed to be the most important market in the world. According to data from IDC, Apple’s market share during the second quarter fell to 28%. During the same period in 2012, Apple’s Chinese tablet market share was at 49%.

“Apple has lost its luster in China in the past six months and is no longer the must-have product in any category,” China Market Research Group managing director Shaun Rein told Bloomberg in an interview published on Aug. 21. “Consumers (in China) are more price-sensitive. Before, people would skip lunch to buy an iPad.”

That comment is an important one to dissect. The analyst is not necessarily saying that Apple’s market share is declining because its quality is slipping, he’s saying that the company is having trouble because consumer attitudes are changing. Sure, they can get their hands on a high-end, top-of-the-line iPad, but at least in China, it’s even more desirable now to buy a cheaper slate that can do everything an iPad can, albeit not as well.

(Stay on top of the latest iPad and Android news, reviews and analysis by subscribing to the free TabTimes for Android and TabTimes for iPad newsletters).

Value in cheaper Android slates

Judging by the iPad’s worldwide sales, the same appears to be true in other markets. More people are buying iPads, but a much greater number are now finding value in cheaper Android slates.

Which, of course, brings us to the ultimate question: can Apple continue to deliver enough quality in its products to get more and more customers to buy its iPad? Further, can Apple afford to continue to deliver distinctly better quality, and thus, charge more, realizing that consumers around the globe, and especially in the most important market, China, are driven by prices?

Although Apple would like to make us believe that the tablet market is PCs all over again, the smart money is on not believing that. Yes, things look similar now, but a massive, burgeoning consumer economy is developing in China, and that, alone, has the potential to be extremely impactful.

Add that to a general desire on the part of consumers all over the world to save cash, concerns over long-term economic factors, and the very fact that Android is a better option for some tablet customers, and we might be on the cusp of a dramatic shift in how Apple is viewed and its products purchased.

The iPad might reign supreme right now. But if things keep up, it might not stay that way for long.

TabTimes contributor Don Reisinger is a New York-based technology writer who's work has appeared in CNet, eWeek and other publications.
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Comments

 
  • gkantz
    1 year 1 week ago

    Sorry, but I'm not completely sold on this article. One thing I'll say about Apple is that they are foolishly waiting too long between product cycles with no major announcements (save for new OSes that aren't even out yet) until next month. But remember that Apple is a huge bellwether of the marketplace, and they may still have things up their sleeves that will be revealed in September that negate the aforementioned theories. The Android tablet market will grow, but if new models of iPads and iPad minis wow the marketplace, don't be surprised if some of this growth is stifled.

  • sarahbeck
    1 year 1 week ago

    Interesting article with some good points - two new Android tablets available from China manufacturers hit this mark quite well which have launched in the last few weeks and seem to offer some of the best features and specs so far this year--

    One new model is the Pipo M7 Pro($255) which for about the same price as the new Nexus 7, features a larger 8.9 inch display with 1900X1200 screen resolution that uses advanced Samsung PLS technology, along with a Quad core processor, and built in GPS navigation-- and is packed with features that compare to the new Nexus -- with premium speakers, WiFi with both 2.4 and 5.0 GHz frequencies for greater connection, and a choice of using standard Android O/S or a Windows style User Interface that makes the Android experience much more intuitive and easier to use -- a 3G HSPA+ edition is also available for $30 more.

    One other new tablet to launch next week is the Novo 7 EOS ($189) -- with a key advantage is the flexibility to use it for Internet data access and voice calling through any GSM Wireless carrier, including AT&T and T-Mobile... with a built-in SIM card slot that provides 3G HSPA+ connection and an Android phone SIM card maybe used interchangeably with both phone and tablet. The new Novo 7 EOS is made by Ainol Electronics, which won runner-up for Best-Tablet-of-the-Year at CES 2012 -- and features a 7-inch HD screen (1280x800) like the Kindle Fire, along with 16GB Memory, Bluetooth wireless connection to headsets and printers, a 2 Megapixel webcam & 5 Megapixel rear camera, HDMI, Google Play and a 4400 mAh battery. The Novo 7 EOS may not offer 4G LTE speeds but overall is sufficient for most needs and doesn't cost $350-$500 which is what you'll pay for a 4G-enabled tablet.

    One of the first sources in the U.S. to offer these new Android models is a site called

    TabletSprint --

  • David Needle
    1 year 1 week ago
    John, I think you have hit on where things are headed if nothing changes. It will be interesting to see if Apple is willing to change or adapt it's strategy.
  • John Smurd
    1 year 1 week ago

    Many of us are starting to question whether numbers IDC, Gartner, and others give for sales of Android tablets are accurate.

    Apple spells out exactly how many tablets it sells each quarter but no other company does. The analysis companies are forced to guess, and if you compare their guesses you'll see they are widely different, varying by millions of units.

    Generally, the disparity doesn't come from sales of devices from Samsung, Asus, and similar well known companies. The market analysis companies are saying that dozens/hundreds of little known firms are selling tens of millions of Android tablets.

    The analysts are obviously having a very hard time guessing how many of these devices are being sold, and the numbers they are coming up with seem quite questionable.

    Under these conditions, I'm very suspicious of any claim that Apple's market share has been cut in half in a single year.

  • JohnYoung
    1 year 1 week ago

    The big problem at firms like Apple is the leadership are among the 1 percent elite with incredible salaries and employer paid benefits. They just don't get today's middle class often has to choose between giving up health insurance to buy Apple or giving up and dumbing down to a "good enough" Dell computer. Indeed, "Good enough" is the mantra for most middle class wage earners today. We're all buying more generic (Walmart "Great Value") products and hanging on to our old cars and appliances for 6 years instead of 3. If Apple wants to be the sole provider of Macs/iOS devices, they need to provide a greater range. Not the like the crazy 500 minor variations on the same theme like Nokia does with phones or HP does with printers, but let's hope there really is a plastic iPhone. We need a basic, plastic desktop Mac to replace the Mac Mini with features comparable to Dell (including an optical BluRay drive!) at a parity price point. Alternatively, Apple could continue to sell the sexy aluminum housings, but don't make me pay $150 for a new cabinet every 3 years. Just sell me a new plug-and-play module to put in the old chassis, with a new motherboard, etc. That would actually be a very "green" approach. I fear iOS is going the way of the MacOS. It will be relegated to 10% of the market while Android will dominate because it's "good enough."

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