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Tablet market no longer an iPad-only game: IDC

Third quarter media tablet shipments were up 264.5 percent compared with the same quarter a year ago and should pick up even more in the fourth quarter based on the success of lower-priced tablets from Amazon and Barnes & Noble, according to new research from International Data Corp.

The company?s Worldwide Quarterly Media Tablet and eReader Tracker report shows that Apple continued to drive worldwide media tablet shipments in third quarter, having shipping 11.1 million units which is up from 9.3 million units in the second quarter. However, Apple?s worldwide market share for the third quarter was 61.5 percent, down from 63.3 percent in the second quarter.

?The biggest surprise was that Apple actually came in a bit lower than we had predicted in the third quarter,? said Tom Mainelli, research director for mobile connected devices at IDC, Framingham, MA. ?The number of units they shipped was up pretty dramatically between the second and third quarters just not as high as we thought they were going to be.

?I think the big news for marketers is that, looking beyond the third quarter, there is a market here beyond the iPad,? he said.

?There has been a lot of commentary saying that there is no tablet market just an iPad market. However, we are seeing that the Kindle Fire and Nook Tablet are starting to gain traction in the fourth quarter and really growing the market because of their lower price points."

Price advantage
The report found that worldwide media tablet shipments rose by 23.9 percent in the third calendar quarter of 2011 for a total of 18.1 million units. This number is 5.8 percent below IDC?s earlier forecast of 19.2 million units.

Despite the lower-than-expected shipments for tablets in the third quarter, IDC expects demand will be strong in the fourth quarter and has increased its shipment forecast for 2011 to 63.3 million units, up from a previous projection of 62.5 million units.

Rounding out the top five tablet manufacturers by third quarter shipments are Samsung with a 5.6 percent share of the market, Hewlett Packard with a 5 percent share, Barnes & Noble with a 4.5 percent market share and ASUS with a 4 percent share.

While IDC expects the iPad to have its biggest quarter yet in the fourth quarter, Apple will likely have to work harder to maintain its market share leadership.

?There are a finite number of people who will pay $499 for a device that we consider additive,? he said.

?Going forward, iPad will continue to grow but they are probably going to have to try a little bit harder which means coming out with lower priced products or even a 7-inch product to appeal to the people who are  buying Kindle Fire and Nook tablets.?

Apple's larger portfolio of tablet-specific apps, upcoming iPad versions, and growing physical store presence in key emerging markets like Asia/Pacific will help maintain its global leadership, according to IDC.

Android benefits
By platform, Android followed iOS with 32.4 percent share, down from 33.2 percent in the second quarter.

Despite Android?s loss of share in the third quarter, IDC expects Android to make significant gains in the fourth quarter to achieve a 40.3 percent share. This growth will be driven by the entrance of Amazon?s Kindle Fire and, to a lesser extent, Barnes & Noble?s Nook Tablet.

Amazon?s gains will come at the expense of other operating systems, which iOS expected to drop from 61.5 percent to 59 percent.

EReaders also continued to see strong shipment growth in the third quarter, with worldwide shipments totaling 6.5 million units, up from 5.1 million units the second quarter. Shipments were up 165.9 percent on a year-over-year basis.

Growth is expected to continue in the fourth quarter thanks to Amazon?s introduction of the $79 entry-level Kindle and $99 touch-based Kindle, which led to a round of price cuts from competitors.

?Over the course of 2011 we saw Android?s market share decline but with the fourth quarter we expect it to take a pretty dramatic leap,? Mr. Mainelli said. ?What?s interesting is that the products becoming popular are not standard Android tablets ? they are very specialized versions of Android for Amazon and Barnes & Noble.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York