Apple's iPad market share has a bite taken out of it by lower-priced tablets
By Chantal Tode
November 6, 2012
The iPad mini
In a sign of strong interest from consumers for lower-priced tablets, iPad’s market share dropped to 50 percent in the third quarter, while Samsung, Amazon and Asus all picked up share, according to new research from International Data Corp.
With Apple reporting that it sold three million iPad minis this past weekend - the first time the iPad mini and fourth generation iPad were available - the drop could be a temporary one. However, the shift toward lower-priced tablets could have an impact on the revenue Apple generates in this category.
“The greatest significance of this news will, in fact, be to Apple's bottom line,” said Amy Vale, vice president of global research and strategic communications at Mojiva, New York.
“As adoption of new technology grows, it’s likely we’ll see a relative shift upwards in the number of consumers willing to purchase a similar device at a lower price point,” she said.
“I'm sure Apple has a plan for how to grow market share as this happens, no doubt that was the impetus behind the iPad mini release.”
Apple’s share of worldwide tablet shipments dropped from 65.5 percent in the second quarter to 50.4 percent in the third quarter.
During the same period, Samsung’s tablet shipments jumped 115 percent from the second quarter and 325 percent year-over-year for a total of 5.1 million units. The growth was driven by Samsung’s Galaxy Tab and Note 10.1.
Samsung’s market share reached 18.4 percent during the third quarter, the first time a competitor has reached this level of share since the original launch of the iPad.
Worldwide tablet shipments totaled 27.8 million units in the third quarter of 2012, up 49.5 percent year over year and 6.7 percent compared with the previous quarter.
Apple had a strong second quarter in the tablet category. However, as rumors of a new iPad mini heated up, some consumers may have held off buying a new iPad to wait for a newer, less expensive offering.
“There is a certain level of significance behind Apple losing share as it means Android tablets are starting to be embraced by consumers,” said Ryan Reith, San Mateo, CA-based program manager at IDC. “However, we believe Apple's announcements of iPad mini and 4th generation iPad played a large role in consumers holding off purchases until Q4.
“We expect Apple to regain some of its share in Q4 with most likely record quarterly sales,” he said.
“As for the consumer, clearly there are more options in the market than ever before, and with the launch of Windows 8 and Windows RT tablets it will further add to the list of tablet choices. Despite the variety of options we still see Apple as the predominant tablet manufacturer over the coming 5 years.”
While the iPad mini and fourth generation iPad are selling well, the iPad mini’s relatively high $329 starting price point should leave room for less-expensive Android tablets to continue to gain steam.
Amazon’s market share grew from 4.8 percent in the second quarter to 9 percent in Q3 for a total of 2.5 million units shipped. The company did not have product in the market in the third quarter of last year.
During the third quarter of this year, Amazon announced its new Kindle Fire HD tablets. It began shipping the new 7-inch HD version in the United States in mid-September.
With distribution growing to five additional countries in the fourth quarter, Amazon’s growth is expected to continue.
ASUS also gained market share, driven by strong shipments of its Google-branded Nexus 7 tablet. Asus shipped 2.4 million units in the third quarter, up 242.9 percent year over year, for an 8.6 percent share of the market.
In other iOS news, the iPhone’s share of quarterly global smartphone app downloads dropped to 29 percent in the quarter compared to 47 percent for Android smartphones, according to new research from ABI Research.
While the iPhone’s share of downloads tends to see a lot of seasonal fluctuation, the second quarter numbers are notable because this is the first time the number has dropped below 30 percent, according to ABI’s estimates. In the year prior, the number has stayed consistently between 30 percent and 37 percent.
ABI Research attributes the drop primarily to Apple’s clampdown on download bots earlier this year. Download bots are automated programs used by some developers to download apps until they reach the top of the charts.
The issue was reportedly widespread on the iOS platform previously but, for the most part, is as not as big problem on Android because of Google’s different app-ranking methods and to the fact that developers typically are not making as much money on Android.
However, another reason for the drop in the iPhone’s share of app downloads is the momentum behind the iPad. ABI Research estimates that in the first half of the year, the iPad saw over five times more app downloads than all Android tablets combined.
“Android-powered tablet devices have many benefits, including lower price point s and variation in screen sizes,” Mojiva’s Ms. Vale said.
“It shouldn’t really change how marketers are developing their mobile advertising strategies,” she said. “Advertisers and agencies should be targeting both Android and Apple devices to ensure their mobile advertising campaigns have strong reach and scalability. ”
Chantal Tode is associate editor on Mobile Marketer, New York
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Comments on "Apple's iPad market share has a bite taken out of it by lower-priced tablets"
Tom Klein says:
November 6, 2012 at 8:22am