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Apple Continues To Lose Tablet Share But Does It Matter?

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IDC released its estimates for June quarter tablet shipments and except for Lenovo and Tier 3 vendors it wasn’t a pretty picture. Worldwide tablet shipments grew 11% year over year to 49.3 million and declined 2% from the March quarter. While the 11% growth rate was substantially better than the March quarter’s 4% year over year growth it was largely due to Lenovo, up 60% year over year, and the other category growing 39%.

Apple maintained its number one share position at 26.9% (13.3 million iPads) but is down from 33.0% a year ago (14.6 million) and 60.2% two years ago (17 million). Samsung has seen its share increase from two years ago from 7.4% to 17.2% but it is down slightly from 18.8% a year ago.

Lenovo came in third but lags far behind at 4.9% share in the June quarter. It has seen strong growth at almost 65% year over year but since it was 4.8% share in the September 2013 quarter its growth rate looks like it will significantly decelerate this quarter. The other category has seen its share increase from 21.4% two years ago to 37% a year ago to 44.4% this year. Without seeing the detailed data I’d assume it is low priced (and probably low usage) tablets especially in Asia and other underdeveloped countries. I have also created a Google Doc with IDC tablet information going back to the March 2011 quarter available via this link.

Jean Philippe Bouchard, IDC’s Research Director for Tablets wrote "As we indicated last quarter, the market is still being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles. We can also attribute the market deceleration to slow commercial adoption of tablets. Despite this trend, we believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific offerings, as illustrated by the Apple and IBM partnership, come to market."

Source: IDC Worldwide Quarterly Tablet Tracker, July 24, 2014

But is losing market share hurting Apple?

While it is a U.S. and Canadian survey Chitika Insights latest data shows iPads share of ad impressions holding steady in the high 70% area with Amazon second at 7.3% and Samsung third at 6.3%. This type of statistic is an important gauge on which tablets are being used and could be more important than unit market shares.

The share shifts in the tablet market feel similar to the smartphone market. Apple is losing share but maintaining a good lead in usage and profitability. In some aspects price competition in tablets will be more brutal than smartphones since tablets are more of a nice to have vs. a must have product.

While iPad’s have been between 15% and 20% of Apple’s total revenue over the past year the company’s gross margin has been holding relatively steady and actually increased over the past year. Additionally Apple has been able to hold the iPad’s Average Selling Price (ASP) relatively stable over the past five quarters slightly decreasing from $449 in the March 2013 quarter to $444 in the recent June 2014 quarter.

Follow me on Twitter @sandhillinsight. You can find my other Forbes posts here.