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Apple hit by Android tablet demand and iPad Mini wait; analysts think Windows 8 tablets maybe overpriced

by Doug Drinkwater

November 5 2012

Apple's tablet market share took a significant hit in Q3, according to IDC
Apple's tablet market share took a significant hit in Q3, according to IDC

The latest quarterly report from IDC suggests that the days of the tablet market being “iPad only” are long gone, with Apple facing increasing competition from increasingly popular Android tablets and Windows 8 devices.

The research firm’s new study revealed that worldwide tablet shipments increased by 49.5% year-on-year and 6.7% quarter-on-quarter to 27.8 million units in Q3, with this surge largely down the rise of Android tablets.

Apple, in contrast, saw its healthy market share continue to fall, dropping from 65.5% in Q2 to 50.4% in Q3, with the other top five tablet vendors (Samsung, Amazon, Asus and Lenovo) gaining as a result.

"After a very strong second quarter, Apple saw growth slow as both consumer and commercial (including education) shipments declined, and rumors of a forthcoming iPad mini began to heat up," said Tom Mainelli, research director of tablets at IDC.

"We believe a sizeable percentage of consumers interested in buying an Apple tablet sat out the third quarter in anticipation of an announcement about the new iPad mini. Now that the new mini, and a fourth-generation full-sized iPad, are both shipping we expect Apple to have a very good quarter.

"However, we believe the mini's relatively high $329 starting price leaves plenty of room for Android vendors to build upon the success they achieved in the third quarter."

One of the biggest beneficiaries of Apple’s slump was Samsung which, driven by strong demand for the Galaxy Tab and Note 10.1, shipped 5.1 million tablets in the quarter, over twice as much from Q2 and three times as many shipments from the year before.

Lenovo and Asus also enjoyed ‘solid’ year-on-year growth, while the release of the 7-inch Kindle Fire HD and refreshed Kindle Fire helped Amazon grow from 4.8% in Q2 to 9% in Q3. This comes despite Amazon focusing largely on the U.S. market only, although it is branching out to five new countries in Q4.

IDC expects the arrival of Windows 8 tablets to add to market competition on Apple, but believes that high prices could prove to be the stumbling block.

"Competitors are turning up the pressure on market leader Apple," said Ryan Reith, program manager for IDC’s Mobile Devices Tracker. "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."

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