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Tablet shares shift towards Android in 2011

by Alistair Lowe on 26 January 2012, 09:49

Tags: Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG)

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Numbers from the ongoings of 2011 are beginning to roll-in and market researcher, Strategy Analytics, has been crunching away to bring us the details of tablet shipments and market shares from last year.

Tablet sales figures for 2010 and 2011

It's clear that Apple still holds the majority share with 57.6 per cent of the market, however, this is a 10.8 per cent drop in market share over 2010; with Microsoft tablet sales remaining relatively static all the points go towards Google's Android, that has opposingly increased its market share by 10.1 per cent. Mind you, this comes as little surprise, prior to 2011, Android tablets lacked the tablet-friendly Android 3.x honeycomb operating system and as such lacked large brand name backers; since 2011, we've seen the release of premium high-end Android tablets from the likes of ASUS, Motorola, Samsung, Sony, LG and Acer with other well known firms such as Amazon and its Kindle Fire, joining in with affordable, yet relatively performance-packed tablets, able to reach market price-points yet to be touched by Apple.

The bottom line, however, is that despite losses and gains in market shares, few firms, perhaps with HP and RIM as the exceptions, have lost in the still expanding tablet market last year, as it saw an increase in growth of 150 per cent and so whilst firms may be fighting for a larger slice of the pie, it's not yet time to worry, as the pie itself continues to grow at an incredible rate.



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It's clear that Apple still holds the majority share with 57.6 per cent of the market, however, this is a 10.8 per cent drop in market share over 2010; with Microsoft tablet sales remaining relatively static all the points go towards Google's Android, that has opposingly increased its market share by 10.1 per cent.
If Apple lost 10.8% market share and Android gained 10.1 then you surely can't say that “all the points go towards Android”?

I also remain less than convinced that Microsoft's sales were static - the figures show going from 0.0M shipments to 0.4M, and their marketshare going from 0 to 1.5%. Or have I missed something obvious?

Presumably the Microsoft tablet sales are Win7 ones like the HP Slate 2 - asking because I've seen very few Microsoft tablets for sale, seems to be a two horse race between iPad and the various Android ones.
crossy
If Apple lost 10.8% market share and Android gained 10.1 then you surely can't say that “all the points go towards Android”?

I also remain less than convinced that Microsoft's sales were static - the figures show going from 0.0M shipments to 0.4M, and their marketshare going from 0 to 1.5%. Or have I missed something obvious?

Presumably the Microsoft tablet sales are Win7 ones like the HP Slate 2 - asking because I've seen very few Microsoft tablets for sale, seems to be a two horse race between iPad and the various Android ones.

“relatively static” :)

They did change as you say, but comparatively very little.
I think we can draw a number of conclusions from those figures, but everything needs to be in the context of one fact - sales went from 10.7m to 26.8m units. i.e. two and a half times the market size.

Next, that's a typical profile of an emerging technology. Initially, you get low volume high priced sales to early adopters, but then, prices come down, competitors come in and product trend towards catch-up. Market size goes up, and it's pretty much inevitable that cheaper products will gain in market share, partly because they're starting from a lower base, and partly (a large part) because a LOT of people simply won't pay the high-end price …. me included, most of the time.

So as a market grows and moves downwards on the price scale, it's inevitable that high-end operators like Apple will lose market share, but it's also worth pointing out behind that 10% reduction in market share, Apple also managed to more than double sales, from 7.3m to 15.4m units.

In other words, all this really shows is that the technology has caught on, the market is expanding as as it does, it inevitably moves down in price. If Apple won't drop prices to follow it, they will lose on on those that won't, or can't, buy at the higher prices. But with pricers maintained, and sales doubled, and no doubt profits up too, I doubt they're terribly upset about reducing market share.

The real picture here is that the market itself is expanding fast, suggesting that tablets has caught on, and by the look of it, achieved critical mass.
It's interesting to note this decline in market share for the iPad. However it's not surprising for several reasons;

1. Apple don't care about market share. They care about profit/revenue. See iPhone and all other products. Market share can be bought like microsoft are trying to do currently and how RIM and HP did in selling off their tablets at a loss. Revenue and profit cannot be.
2. Apple had a massive part of the tablet share due to being the first to sell tablets in any large volume. As soon as others come along and start selling tablets in larger numbers like the kindle, it is going to affect market share.

It's interesting that despite a market share decline in both of their two major profit and revenue generators they had their biggest quarter on record. One that I don't think can be repeated as it had to many outside factors that contributed:
1. New iPhone 4s sold for the first time in the quarter. This new model coming after a longer previous cycle of the iPhone 4.
2. Christmas and holiday sales
3. A 14week quarter instead of the normal 13 weeks
Saracen
In other words, all this really shows is that the technology has caught on, the market is expanding as as it does, it inevitably moves down in price. If Apple won't drop prices to follow it, they will lose on on those that won't, or can't, buy at the higher prices. But with pricers maintained, and sales doubled, and no doubt profits up too, I doubt they're terribly upset about reducing market share.

This graph from Horace at Asymco is interesting on Apple's pricing structure



http://www.asymco.com/2012/01/26/price-competition/

This suggest that Apple's prices have remained static despite other companies slashing prices. There are a variety of explanations that could account for this, but it's an interest graph.